Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

SUTTON COLDFIELD CORPORATION BILL [Lords]

Read the Third time and passed, with Amendments.

CITY OF LONDON (VARIOUS POWERS) BILL [Lords]

As amended, considered; to be read the Third time.

PETITION

Land Titles, Kenya

Mr. F. Harris: I beg to present a Petition. Because of my known personal associations with Kenya, I have been requested by Kenya landowners, holding freehold or leasehold grants under the provisions of the Crown Lands Ordinance, 1915, to present to the House of Commons this Petition with over 3,800 signatures. Against each signature details are given of the property held. I understand that this is the first Petition which settlers of a British Colony have found it necessary to submit to the House of Commons.
The Petitioners state how they originally came into possession of their titles granted by the Governor of Kenya on behalf of Her Majesty the Queen and her predecessors. Many of the Petitioners were encouraged by the British Government to settle in Kenya under the Discharged Soldiers' Settlement Scheme at the termination of the 1914–18 war, and others emigrated to Kenya under the auspices of the European Agricultural Settlement Board established by the Kenya Government.
The Petitioners explain how they have spent considerable sums in developing their property and this has now resulted in a European agricultural investment alone in Kenya exceeding £70 million. This investment has been made in reli

ance upon the continuing validity of titles granted by the Crown and the ability of Her Majesty's Government to maintain peace and good order in the Colony.
It is recognised that Kenya will eventually become an independent State under African majority rule. On numerous occasions African political leaders have been asked their intentions in recognising the validity of titles of land and property once independence has been granted, but as yet, regrettably, no satisfactory assurances have been given. Such lack of confidence arising has made European property virtually unsaleable and considerable hardship is being caused, including hardship to widows and old people who cannot dispose of their property. Furthermore, the present titles are no longer regarded as security by banks and other financial concerns. It is felt that such property may be confiscated by a future Government without any or adequate compensation, and all this has, unfortunately, meant the slowing down of agricultural development to the detriment of all peoples in Kenya, with a serious effect on Kenya's economy, which can unhappily be seen in increased unemployment affecting all races, particularly Africans.
This Petition has been beautifully prepared, and I hope that hon. Members will take the opportunity of seeing it at the Journal Office.
The Petition concludes with the Prayer
that such proper and immediate steps are taken in the premises as will remedy the present lack of confidence in land titles which is causing untold harm to the economy of this Colony and Protectorate and to the welfare of its peoples and in particular

(a) that it be acknowledged that responsibility for such titles rests with Her Majesty's Government;
(b) that in pursuance of such responsibility immediate steps be taken to restore the confidence of title holders by firm and effective guarantees for compensation in the event of expropriation whether by sequestration or by circumstances which render the quiet enjoyment of such titles no longer possible;
(c) that in the case of such title holders who wish to dispose of their assets urgent steps are taken to restore free negotiability in land so that such land may be acquired, utilised and developed in the interests of the general economy of the said Colony and Protectorate.
And your Petitioners, as in duty bound, will ever pray, etc.

To lie upon the Table.

Oral Answers to Questions — HIGH COMMISSION TERRITORIES

Morse Mission (Recommendations)

Mr. Wan: asked the Secretary of State for Commonwealth Relations whether he will make a statement about the implementation of the recommendations of the Morse Report on the development of the High Commission Territories.

Mr. G. M. Thomson: asked the Secretary of State for Commonwealth Relations if he is now in a position to make a statement on the extent to which the Government intends to carry out the recommendations of the Morse Commission Report on the High Commission Territories; and if he will give details of the financing of these plans.

The Under-Secretary of State for Commonwealth Relations (Mr. Bernard Braine): The Morse Mission, in its Report, recommended further development in the three High Commission Territories under the main heads of roads, agriculture, including animal husbandry and education, and in Bechuanaland, water supplies, additional to the work already proceeding in these fields with substantial assistance from Colonial Development and Welfare funds. The Mission recognised that its recommendations could only be put into effect over a period of years
To enable a start to be made with implementing the Mission's recommendations and further development in the field of education, authority is being given to the High Commissioner to incur additional development expenditure up to £1.2 million in the period ending 31st March, 1963, above that already authorised under the Colonial Development and Welfare Act, 1959. This authorisation means that the High Commissioner will dispose of nearly £6 million in all from now to March, 1963, for work on existing schemes and the commencement of new ones.
There is also the possibility of finance from the International Development Association and other international organisations.

Mr. Wall: While I welcome my hon. Friend's statement, may I ask whether the Morse Mission recommendation about Roma University is included in the sums which he mentioned? Secondly, how much money has been made available in total to the High Commission Territories for development over a period of five years from, say, 1959?

Mr. Braine: I should prefer my hon. Friend to put down a Question about the first point. The answer to the second question is that, including the unspent allocations from the previous Act, the sum is over £9 million.

Mr. Thomson: While I welcome the fact that the Government have at last decided to make a start with the Morse recommendations, is the Minister aware that this is a very modest start? Is he aware that the Morse recommendations suggested that there should be not £1.2 million of capital development but £7 million of capital development very quickly and then £500,000 a year of recurrent expenditure for five years? Do the Government intend to go ahead to accept the Morse recommendations in their entirety as the very minimum necessary to put the High Commission Territories on a decent economic basis?

Mr. Braine: As the hon. Member knows, we have to take account of our serious balance of payments position and the other heavy calls upon our resources, but I am confident that the total sum-likely to be available to the Territories from all sources will be enough to enable them to undertake or make progress with all the development projects within their physical capacity. As for the details, I am in consultation with the High Commissioner as to the projects which are most urgent at present.

Development Adviser

Mr. Marquand: asked the Secretary of State for Commonwealth Relations whether he will appoint a development officer of wide experience in Africa to superintend the development projects which are planned for Basutoland, Bechuanaland and Swaziland.

Mr. Braine: As was stated in reply to a Question by my hon. Friend the Member for Reading (Mr. Emery) on 28th July last, Sir Gordon Hadow. who


was a member of the Morse Mission, and had previously had wide experience in administration in West Africa, holds the appointment of Development Adviser to the High Commissioner for Basutoland, the Bechuanaland Protectorate and Swaziland.

Mr. Marquand: May we take it that this appointment means that the Government have the intention of making the development of the three High Commission Territories an operation which the whole world can see as an operation shop window, as someone has called it? Does it mean that, although it is nearly eighteen months since the Morse Mission presented its Report, the Government intend to make a really good thing of this, something for which the whole world can admire this country?

Mr. Braine: My right hon. Friend has had the benefit of the advice of this able and experienced administrator during the period which the right hon. Gentleman has mentioned. However, I should have thought that the Answer which I gave to the first Question on the Order Paper is the answer to his supplementary question.

Mr. Emery: Would my hon. Friend state that, as well as making this operation a shop window, it should be really worth while in its development for all of the Territories? Can he say whether any international finance, particularly from the International Development Association, might be used towards this end?

Mr. Braine: The answer to the first part of my hon. Friend's supplementary question is "Yes". With regard to the second part, I referred to the possibility of finance from the International Development Association, which recently sent a mission to the High Commission Territories to examine the possibility of a loan for road construction. We are also in touch with such organisations as the United Nations International Children's Emergency Fund, the World Health Organisation and the United Nations Special Fund, which is at present considering applications made to it by the Bechuanaland Protectorate for a preliminary survey of the Okavango Swamps in the north-western corner of the Territory and a hydrological survey of river water sources over the whole of the Territory.

Mr. Marquand: The hon. Gentleman's Answer to the earlier Question was very disappointing. It implied that the Government were prepared only to continue with a small instalment of the Morse development plan. Would not he agree that there is no project of economic development in the whole of Africa more important at present than this one? Will he indicate that the Government intend over a period of years to carry through all the recommendations in the Morse Report?

Mr. Braine: This new money will enable the High Commissioner to supplement the development plans which are already in existence. The right hon. Gentleman must not suggest that development plans are not already under way. As a matter of fact, the allocation of £6-75 million to the three Territories under the Colonial Development and Welfare Act, 1959, was not enough to carry out these plans in full. Therefore, a large part of the new money will be devoted to this purpose.

SWAZILAND

Education

Mr. Brockway: asked the Secretary of State for Commonwealth Relations what decisions have been made on African education in Swaziland, following the termination of education facilities in the Union of South Africa: and if these decisions include the inauguration of inter-racial schools at all levels with equal opportunities for African and European children.

Mr. Braine: The education facilities provided for Swazi students by South African authorities have been access to South African universities, and the right to take public examinations set by the Joint Matriculation Board of the University of South Africa. The former facility was withdrawn in 1959 except in regard to the Natal Medical School.
Suitably qualified Swazi students can now receive university education at either Pius XII College at Roma in Basutoland, the University College of Rhodesia and Nyasaland, or at universities overseas.
The latter facility is still provided, but as I informed the hon. Gentleman in


reply to his Question on 29th June, facilities are also provided for African and other pupils to take the London Overseas General Certificate of Education.
In regard to inter-racial schools, as I stated in reply to a Question by the hon. Member for Dundee, East (Mr. G. M. Thomson) on 29th June, the Swaziland education authorities are examining how these can best be introduced.

Mr. Brockway: Does not the termination of the arrangements with the Union of South Africa give an opportunity for a new start in education in Swaziland, not only in higher education but in primary education, too? Is the Minister aware that there is segregation in the schools of Swaziland and that only £5 a year per head is spent on the African child compared with £90 on the European child? Will he do something to establish free inter-racial compulsory education for all the children in Swaziland?

Mr. Braine: The opportunity for taking a fresh look and making a fresh start in these matters is being taken. The question of examinations is being considered at the moment by the Swaziland Educational Board. The hon. Member asked about progressive integration in the schools. The Board is considering, among other matters, the replacement of the African, European and Euro-Asian Advisory Boards by one inter-racial board; extra-mural activities on a non-racial basis; integration in the secondary schools; and the raising of standards in African primary schools to make possible integrated schooling on a wider basis.

Mr. Marquand: The Minister mentioned Pius XII College at Roma. Is this institution fully recognised as an institution of higher learning of university standard?

Mr. Braine: I prefer that question to be put on the Order Paper. It is important, and I should prefer it to be put down separately.

SOUTHERN RHODESIA

United Kingdom High Commissioner (Meeting)

Mr. G. M. Thomson: asked the Secretary of State for Commonwealth Relations if he will state the purpose for

which the United Kingdom High Commissioner to the Federation of Central Africa attended the conference of 18th May between the Prime Minister of Southern Rhodesia, the Minister of Native Affairs, and the Council of Chiefs.

Mr. Braine: The United Kingdom High Commissioner attended the meeting at the personal invitation of the Prime Minister of Southern Rhodesia, Sir Edgar Whitehead.

Mr. Thomson: Is the Minister aware that the Commissioner's presence at this meeting raises rather serious questions? Is the Minister aware that this was a meeting at which the Southern Rhodesian Government informed the Chiefs of the still secret constitutional proposals and put forward the proposition that there should be no political meetings in the reserves? Is there not a danger that Her Majesty's High Commissioner's presence at that kind of meeting is bound to link the High Commissioner, in the eyes of citizens of Southern Rhodesia, with the political regime in that country? Is it not very important that the High Commissioner should watch these invitations very carefully and maintain his position as an independent representative of this country out there?

Mr. Braine: I cannot accept for one moment the interpretation which the hon. Member put upon the meeting. The purpose of the meeting was to enable Sir Edgar Whitehead to consult the Chiefs on certain matters which were of prime importance to the African population and which had been left over for more detailed consideration from the Constitutional Conference in February. I am not responsible for what happened at the meeting. It is for the Southern Rhodesian Government, whose meeting it was, to make any public report on what happened there. I am sure that the High Commissioner acted very properly in accepting the personal invitation.

Mr. Thomson: Is the Minister aware that the interpretation which I have given of the meeting is the interpretation put out by the Federal Government? Is he aware that what matters is not what the Government feel about the consequences of the meeting but the impact which it makes upon the minds of the Africans of Southern Rhodesia?

Mr. Braine: The hon. Member misunderstands. The purpose of the meeting was for Sir Edgar Whitehead to consult the Chiefs. The National Democratic Party had, as other African political leaders had, an opportunity quite separately to express their views. The meeting was properly conducted, and I am very glad that our High Commissioner was able to be present.

Constitution

Mr. Stonehouse: asked the Secretary of State for Commonwealth Relations why he has made no provision for the African population of Southern Rhodesia, who now enjoy the protection of the United Kingdom, to be consulted about the new Constitution and for their prior approval to be obtained for the withdrawal of the provisions which protect them from discriminatory acts of the Southern Rhodesian legislature, in view of the fact that provision is proposed in the new Constitution for the African population to have power to reject subsequent changes in the Constitution.

Mr. Braine: The African population were consulted through the attendance at the Constitutional Conference of Africans representing all shades of political opinion.

Mr. Stonehouse: Is the hon. Gentleman aware that the first part of that Answer is quite incorrect? [HON. MEMBERS: "Oh."] Is he further aware that 2 million people in Southern Rhodesia now enjoy the protection of the United Kingdom? Why is that protection being withdrawn without their prior approval being obtained?

Mr. Braine: The hon. Gentleman knows perfectly well that the African representation at the Constitutional Conference in February was not limited to members of one party, and there were present distinguished Africans from the delegations of other parties as well as a representative of the Chiefs, and none of the African delegates at the conference at the time dissented from the contents of the Conference Report.

Mr. Stonehouse: But is the Under-Secretary of State aware that those representatives have repudiated the agreement made because the Southern Rhodesian Government and the United Kingdom

have gone back on the commitment then made on land apportionment?

Mr. Braine: This House has fully debated the matter and approved the constitutional provisions.

AUSTRALIA

Woomera Rocket Range

Mr. Darling: asked the Secretary of State for Commonwealth Relations what requests have been received from the Australian Federal Government for financial assistance towards the resettlement of Australians displaced from their lands by the Woomera Rocket Range.

Mr. Braine: None, Sir.

Mr. Darling: Is the Minister aware that the Australian Board of Missions which looks after the welfare of these first Australians, the aborigines, is very disturbed about the results of their being displaced by the Woomera range? Will he, through the Australian Government, look into what happened to make sure that the facts which the Australian Board of Missions put out are correct? If it seems that some assistance ought to be given to these people as a result of what has happened, will he give an assurance that the United Kingdom will face up to its share of that assistance?

Mr. Braine: I am sure that the Australian authorities will ake note of this, but I know that the hon. Member is aware that the welfare of the Australian aborigines or of any other dwellers in those areas is entirely a matter for the Australian authorities. I understand that compensation has been paid from time to time to Australians for the alienation of small areas where construction has taken place, or for damage, but in all cases the sums have been small. In the sense that under present arrangements Her Majesty's Government pay a share of the total cost of the Woomera range, they contribute indirectly to any compensation payments made.

RHODESIA AND NYASALAND

Loan

Mr. Turton: asked the Secretary of State for Commonwealth Relations whether he is yet in a position to


announce agreement on a loan to the Federation of Rhodesia and Nyasaland.

Mr. Braine: No, Sir.

Mr. Turton: How does my hon. Friend explain that Answer in view of the fact that his right hon. Friend the Colonial Secretary announced ten days ago that the matter of the loan had been more or less finalised? Does he realise that this dithering on the part of the Government is holding up African housing schemes and educational plans in Southern Rhodesia? Will he press for early action in this matter?

Mr. Braine: My right hon. Friend is wrong in suggesting that there has been any dithering or inconsistency in the replies given to him. I answered the Question on the Order Paper. I am not yet in a position to announce the agreement of the loan to the Federation, but I hope that a decision will be made within the next two or three weeks.

Defence

Mr. Stonehouse: asked the Secretary of State for Commonwealth Relations why Her Majesty's Government have approved the joint defence arrangements between the forces of the Federation of Rhodesia and Nyasaland and the Union of South Africa; whether prior approval has been obtained from Her Majesty's Government for the Federal Government to conduct joint defence talks with the Portuguese authorities in Angola and Mozambique; and if he will make a statement on Her Majesty's Government's policy with regard to the external defence relations of the Federation of Rhodesia and Nyasaland.

Mr. Braine: I am informed that there have been no arrangements or talks of this kind, apart from a training exercise between the Royal Rhodesian Air Force and the South African Air Force which was arranged a year ago. The Federal Government exercise responsibilities in defence and external affairs under the Federal Constitution, but naturally consult Her Majesty's Government fully on all matters of common concern.

Mr. Stonehouse: May I ask the Under-Secretary of State whether prior approval will be obtained before the Rhodesian authorities enter into any discussions with the Portuguese?

Mr. Braine: This is a purely hypothetical question. [HON. MEMBERS: "No."] At any time when a matter similar to that comes up, of course there will be the fullest consultations, but there is no basis for this apart from a report which I saw in a newspaper which referred to rumours, musings, and wishful thinking. I do not think that the hon. Member should attach too much importance to a report of that kind.

Mr. Marquand: Nevertheless, will the hon. Gentleman bear in mind that the constitutional position as contained in the Monckton Report is that external agreements in regard to defence made or sought to be made by the Federation of Rhodesia and Nyasaland must have the confirmation of Her Majesty's Government in this country?

Mr. Braine: I would rather put it in this way, that under the Constitution the Federation may exercise such responsibilities in external affairs as may from time to time be entrusted to it by the United Kingdom Government. As was announced in 1957, the Government agreed to entrust responsibility for external affairs to the Federal Government to the fullest extent consistent with the responsibility of Her Majesty's Government in this country under international law so long as the Federation is not a separate international entity.

Mr. Marquand: But would the hon. Gentleman make it clear that Her Majesty's Government in this country do not regard it as consistent with this agreement that the Federation should enter any kind of defence agreement with Portugal?

Mr. Braine: But in fact the Federation has not entered into such agreements.

COMMONWEALTH RELATIONS

Technical and Financial Aid

Mr. Sorensen: asked the Secretary of State for Commonwealth Relations, in view of the policy of Her Majesty's Government to curtail overseas aid, if he has consulted with Commonwealth countries in need of, or anticipating further, technical and financial aid for the development of their countries in respect of this decision and the reason for it.

Mr. Braine: It is not the policy of Her Majesty's Government to curtail the overseas aid. Assistance from British Government funds to developing countries amounted to £150 million in 1960, and it is expected to increase in 1961. What we can afford to do, however, must be determined within the limits imposed by this country's economic position, and the total amount of our aid commitments is kept under careful review.

Mr. Sorensen: Was the recent statement which appeared in the Press that the Government were contemplating restricting aid of this kind quite incorrect?

Mr. Speaker: The Minister cannot be asked to deal with Press statements for which he is not responsible.

Mr. Sorensen: May I change my supplementary question a little and ask about a statement made by a Government Minister?

Mr. Braine: The hon. Gentleman has somewhat shifted his ground. I prefer to stick to the words which I have given to the House to the effect that it is not the policy of Her Majesty's Government to curtail overseas aid and that the sum for 1960 is expected to be increased in 1961.

Common Market (Republic of Ireland)

Mr. C. Hughes: asked the Secretary of State for Commonwealth Relations whether it is proposed to consult with the Government of the Republic of Ireland before negotiations are entered into with the Common Market countries.

Mr. Braine: We have been keeping in close touch with the Government of the Republic of Ireland on the possibility of our entry into negotiations with the European Economic Community, and the Prime Minister and the Ministers of Finance and External Affairs of the Republic of Ireland are coming to London for consultations on 18th July.

Commonwealth Technical Training Week

Dr. A. Thompson: asked the Secretary of State for Commonwealth Relations (1) whether he will arrange for Commonwealth Technical

Training Week to be followed up by similar public and civic activities in subsequent years:
(2) whether it is proposed to hold further discussions with the other Commonwealth countries who sponsored Commonwealth Technical Training Week on the possibility of interchange of training facilities.

Mr. Braine: The possibility of following up Commonwealth Technical Training Week is a matter which the Central Advisory Committee is considering now. The possibility of interchange of training facilities is another matter. There are, of course, regular consultations with the Governments of other Commonwealth countries about technical training under the Colombo Plan and the Special Commonwealth African Assistance Plan and interchanges of training facilities do in fact take place.

Dr. Thompson: First, in view of the success of Commonwealth Technical Training Week and to ensure that it was not a flash-in-the-pan, will the hon. Gentleman bear in mind that some thought should be given to sustaining public activities on this topic in the future? Secondly, will he keep in touch with the new Department of Technical Co-operation on my latter point?

Mr. Braine: I will convey the hon. Gentleman's suggestion to the Central Advisory Committee. I take note of what he has said.

BECHUANALAND

Water Supplies

Mr. Sorensen: asked the Secretary of State for Commonwealth Relations if he will state approximately the cost of procuring adequate water supplies in Bechuanaland; what surveys for this purpose have been made: whether the provision of water is to be confined to the area of the new administrative capital; and what is the number of the staff that will be transferred from Mafeking as soon as water, other essential services and accommodation have been made available.

Mr. Braine: It is not possible to estimate the cost of procuring adequate


water supplies in the Bechuanaland Protectorate until it is known what underground resources exist and the reliability of surface water supplies has been proved. The High Commissioner allocated £725,000 in the five-year development period 1955–60 to the development of underground and surface water supplies throughout the Territory. A sum of £450,000 is being spent in the current development period on the continuation of this work. This includes the cost of surveys, not only for potential sites for a new administrative capital but for the Territory as a whole, since water is a pre-requisite of general economic development.
It is estimated that about 200 staff will be moved from Mafeking.

Mr. Sorensen: While I appreciate fully the very great difficulties in this matter, may I ask whether that Answer means that every endeavour will be made to provide an adequate water supply other than in the contemplated capital?

Mr. Braine: Yes, Sir.

United Nations Mission

Mr. Biggs-Davison: asked the Secretary of State for Commonwealth Relations what conditions have been imposed on the United Nations mission in the Bechuanaland Protectorate.

Mr. Brockway: asked the Secretary of State for Commonwealth Relations what restrictions as regards location have now been placed on the United Nations mission to South-West Africa whilst in Bechuanaland.

Mr. Braine: In telling the Chairman of the South-West Africa Committee that we would do what we could to meet his requests for certain transport and accommodation facilities in Bechuanaland, we imposed no restrictions or conditions upon the Committee's activities within the Protectorate. It was, however, made clear to the Chairman that in granting these requests it was our understanding that the Committee did not intend to enter South-West Africa from Bechuanaland without the permission of the South African Government.

Mr. Biggs-Davison: But what is this Committee doing in Bechuanaland? When the administering Power in South-West Africa is unwilling to receive the mission what is the purpose of its presence in Bechuanaland, especially as there is danger of its embroiling us with the South African authorities whose good will, whether we like it or not, is necessary to the economy of the High Commission Territories?

Mr. Braine: The Committee said it wished to visit the territory in implementation of the General Assembly resolution, and later in Bechuanaland proposed to visit Herero residents originally from South-West Africa. On that basis we saw no objection to the visit for this specific purpose.

Mr. Brockway: While welcoming the opportunities given in Bechuanaland, may I ask whether this mission is not instructed to go to South-West Africa by the United Nations, and are not the Government of the Union of South Africa defying that decision of the United Nations? Why should we not give all possible facilities for the mission to visit South-West Africa even if it is from the territory of our Protectorate?

Mr. Braine: We are not responsible for the Government of South Africa, but the Committee made no submission to us that it intended to eater South-West Africa at the time of its request for facilities in the Bechuanaland Protectorate. We have since asked the chairman to confirm our understanding that the Committee will not attempt to enter South-West Africa from the Protectorate without permission.

Mr. Brockway: Why not?

Mr. Braine: Because we are responsible for the Protectorate. We have granted such facilities as we have been asked for within the Protectorate. I think that it is reasonable to expect the Committee to agree to our request not to go beyond the border.

Mr. Marquand: Is the hon. Gentleman aware that it is highly desirable that this Committee should visit Bechuanaland, because there it will find large numbers of refugees who have been driven out of South-West Africa and so will be able to collect a great deal of valuable information? If this Committee should


make a further request to the Government, may we express the hope that the Government would receive it with courtesy and common sense equal to that which they have shown on this occasion?

INDIA AND PAKISTAN

Financial Aid

Mr. F. M. Bennett: asked the Secretary of State for Commonwealth Relations how much British financial aid has been afforded or promised to India and Pakistan, respectively, during 1960 and 1961.

Mr. Braine: In 1960, Her Majesty's Government gave loans to India amounting to £15 million. To help finance the current Indian five-year development plan, which began on 1st April this year, Her Majesty's Government have this year signed Loan Agreements totalling £40 million, and they have recently undertaken to make additional loans totalling £50 million during the period ending 31st March, 1963.
When the current Pakistan five-year development plan began on 1st July, 1960, the Pakistan Government had available for its use £10 million under Loan Agreements made by Her Majesty's Government. Since then, Her Majesty's Government have signed Loan Agreements for a further £8 million, and have recently undertaken to make additional loans, totalling £7 million, available during the period ending 30th June, 1962.

Mr. Bennett: While no one would wish for a moment to cut down on the aid that this country can afford to give to India or any other part of the Commonwealth, may I ask my hon. Friend whether he would comment on the fact that there seems to be a discrepancy between the amounts made available to these two countries out of proportion to their respective populations? Will he bear this fact in mind in future when drafting other forms of aid that we are able to make, especially since Pakistan is a very close and loyal ally as well as a member of the Commonwealth?

Mr. Braine: We do not regard the scale of assistance that we are able to give to Pakistan as out of proportion to the aid that we have given to India.

CYPRUS

Extradition

Mr. N. Pannell: asked the Secretary of State for Commonwealth Relations if he will now state the results of his consultations with the Government of Cyprus regarding the extradition of Cypriot citizens in connection with crimes committed in this country.

Mr. Braine: The consultations are still continuing.

Mr. Pannell: In order to solve this difficult problem, is it the Government's intention to negotiate an extradition treaty with Cyprus?

Mr. Braine: No, Sir. The difficulty which has arisen has been brought about by the operation of a Clause which would have the same effect on an extradition treaty. What appears to be called for here is amendment of the Constitution of Cyprus. That is a matter for Cyprus, and we are consulting them now.

SOUTH AFRICA

Defence Commitments

Mr. Dugdale: asked the Secretary of State for Commonwealth Relations what recent consultations he has had with the Government of South Africa, in view of the latter's proposed military assistance to the Government of Portugal in Mozambique and Angola, to ensure that British forces are not used in such operations under existing Anglo-South African defence commitments.

Mr. Braine: None, Sir. No such Anglo-South African defence commitments exist.

Mr. Dugdale: While I am fully aware of the assistance already given to Portugal in the Angola campaign by the dispatch of arms to Portugal by Her Majesty's Government, may I ask the hon. Gentleman whether he is aware that I am glad to hear that no British troops are to be used in that campaign?

Mr. Braine: Yes, Sir.

EDUCATION

Women Teachers

Mr. Willey: asked the Minister of Education whether he will now make a further statement on his campaign to


encourage women teachers to return to teaching.

The Parliamentary Secretary to the Ministry of Education (Mr. Kenneth Thompson): The latest reports from authorities show than nearly 2,200 married women have been appointed between the launching of the campaign in February and 31st May. Further appointments are likely to be made between now and next September.

Mr. Wiley: Whilst appreciating the efforts being made and the success they are attaining, may I ask whether the Parliamentary Secretary recognises that his Department estimated that there are 50,000 married women who might be attracted to teaching? In view of this, will he redouble the efforts, and also consider what further inducements may be necessary to get married women to return to teaching?

Mr. Thompson: Yes, we are getting the women coming in, and we shall do all we can to make the proposition we have offered attractive.

Mr. Holland: Can my hon. Friend say what proportion coming back are coming back in a part-time capacity?

Mr. Thompson: The fallowing teachers have been obtained so far: 1,250 on a full-time basis; 925 on a part-time basis.

Mrs. White: Has the hon. Gentleman given serious consideration to the desirability of giving better pension schemes to women who are coming back into teaching? That would be the best inducement.

Mr. Ellis Smith: If they looked after the children it would be better.

Mr. Thompson: That is a complicated issue, as the hon. Lady knows, and one we have given a great deal of thought to.

Provincial Museums (Grant-Aided Purchases)

Mr. Boyden: asked the Minister of Education what was the total grant made by the Victoria and Albert Museum to provincial museums for the purchase of exhibits; and what percentage these grants formed of the total expenditure of provincial museums for such grant-aided purchases.

Mr. K. Thompson: The grants made in the financial year 1960–61 totalled £21,747, which represented about 34 per cent. of the total cost of the grant-aided purchases.

Mr. Boyden: Would the hon. Gentleman consider two things? Would he take very serious notice of the Standing Committee's Report on art galleries and museums about the parlous state of provincial museums and do something about it? Will he secondly consider, when the National Art Collection Fund makes a grant to a provincial museum, ignoring it when the Victorian and Albert grant is being considered, because the Victoria and Albert grant is a maximum of 40 per cent. and it looks as though the Victoria and Albert grant is being reduced because of some other grants?

Mr. Thompson: As the hon. Member knows, the basis on which these grants are given takes account of whether other public funds or non-local funds are being contributed to any extent to the purchases. We shall take full account of what is said in the report just issued.

Teachers (Mathematics and Physics)

Mr. Boyden: asked the Minister of Education if he will consult with the Headmasters' Conference with a view to its limiting, during the next few years, its recruitment of mathematics and physics staff in favour of local education authorities' secondary schools.

Mr. K. Thompson: Last year my right hon. Friend consulted the Governing Bodies Associations about ways in which the independent schools might help during the national shortage of teachers. So far as mathematics and physics graduates are concerned there is a shortage in all kinds of grammar schools including independent schools, and the solution lies in an increased supply of graduates from the universities.

Mr. Boyden: But surely in many of these schools the conditions are very much more favourable than in some of the schools adversely affected, and surely it would be helpful for them to make a gesture towards the maintained schools?

Mr. Thompson: I have no evidence that independent schools make appointments which are in any way to be regarded as unnecessary.

School-Building Projects, Essex

Mr. Driberg: asked the Minister of Education how many new school building projects for new housing estates in Essex have been disallowed by him in the past five years, and in such future programmes as have so far been approved.

Mr. K. Thompson: Of 115 projects for new housing estates proposed for major building programmes from 1956–57 to 1962–63, 102 have been included. Of the 13 projects not included, 7 turned out not to be urgently needed, and my right hon. Friend is considering the other 6 for future programmes.

Mr. Driberg: How does the hon. Gentleman reconcile that Answer with his statement in this House on 1st June that provision of new school accommodation on new housing estates and new towns is
an overriding and absolute priority to which we must devote the first of our resources year by year."—[OFFICIAL REPORT, 1st June, 1961. Vol, 641, c. 582.]
Surely his statement today represents a modification of that? In particular, why does the Minister keep on excluding the Thames View Estate from this provision?

Mr. Thompson: The answer to the second part of the hon. Gentleman's question answers the first part. There is no urgent need for additional school buildings in that area which would give the priority the hon. Gentleman has referred to.

Mr. Driberg: asked the Minister of Education if his attention has been called to the statement by the chairman of the sites and buildings committee of the Essex Education Committee, that it is increasingly difficult to get acceptable tenders for school-building projects because so much less important work is being done by Essex builders, and that the lowest of seven tenders received for the building of one new school was £15,000 higher than the expenditure approved for that project by his Department; and what steps he is taking to remedy this situation.

Mr. K. Thompson: Yes, Sir. But if the project is the Aveley Mildmay Secondary School, a tender has now been accepted which is within the revised limit of cost approved to take account of increased labour costs.

Mr. Driberg: But is the hon. Gentlemen aware that the committee chairman on this occasion also said that things are constantly having to be left out of school buildings although they will only have to be put in later on, and that the whole situation about costs and tenders in Essex—and I expect elsewhere—has been reduced to chaos by a combination of Government meanness and contractors' avarice?

Mr. Thompson: I do not propose to follow the hon. Member along those lines of argument. We have no evidence whatever from any source in the country that the kind of conditions which he describes prevail. School building is going on at present at a rate never before achieved.

School Meals (Meat Purchases)

Mr. Darling: asked the Minister of Education if he will request local education authorities to confine their purchases of meat for school meals to suppliers who use the Fat Stock Marketing Corporation's schedules to indicate quality and source.

Mr. K. Thompson: My right hon. Friend does not think it would be appropriate for him to limit suppliers as suggested. Local education authorities are responsible for running the school meals service and it is for them to purchase the meat needed so as to maintain nutritional standards at reasonable cost.

Mr. Darling: Is the hon. Gentleman aware that many meat traders, admittedly a minority of those in the country, mislabel their meat and the local weights and measures inspectors are finding evidence of this all the time? Can the hon. Gentleman give an assurance that the meat supplied to schools is the meat that the local education authorities have paid for? If he cannot give that assurance, would he press on his right hon. Friend the Minister of Agriculture the need to have a proper schedule of gradings of meat


so that action can be taken against those traders who mislabel the meat in the way I have suggested?

Mr. Thompson: I will have inquiries made into whether there are good grounds for thinking that buyers of meat for local education authorities are being deceived in the way the hon. Member suggests, but as far as I have been able to discover up to now there is no evidence to that effect.

Teachers (Technical Colleges)

Mr. Albu: asked the Minister of Education what proposals he has for increasing the number of teachers in technical colleges.

Mr. K. Thompson: Although some important vacancies remain unfilled, the total number of full-time teachers in technical colleges has increased from 11,400 in 1955 to 21,680 this year. This is over 3,000 more than the target recommended by the Special Committee set up in 1956. The National Advisory Council on the Training and Supply of Teachers has prepared a Report, which is to be published shortly, containing its estimate of needs for technical college teachers up to 1970. The Council is now reviewing problems of supply in the light of this Report.

Mr. Albu: Can the hon. Gentleman say whether the figures in the Report show that the original figures were quite inadequate? Can he say when the Report will be published?

Mr. Thompson: The Report will be published when we have had time to consider what it contains and what steps may be called for. I hope that the hon. Member will wait until then to see what the figures reveal. They are very interesting.

Business and Commercial Subjects (Higher Education)

Mrs. White: asked the Minister of Education when he hopes to announce proposals for higher education in business and commercial subjects.

Mr. K. Thompson: My right hon. Friend hopes to make an announcement later this month.

Mrs. White: Is the hon. Gentleman aware that his right hon. Friend's un-

lamented predecessor said on 9th February, 1959, that he hoped shortly to be able to announce the decision of Her Majesty's Government? Is it not about time that the Government got a move on in the matter?

Mr. Thompson: The hon. Lady must be fortified by the undertaking I have just given.

School-Building Projects, Oldham

Mr. Hale: asked the Minister of Education how many schools are included in the building programme of the Oldham Corporation now under consideration; and on how many previous occasions authority has been refused to build each of these proposed schools.

Mr. K. Thompson: The authority has proposed two primary schools and three secondary schools for the 1963–65 major building programmes. Of the primary schools, one was previously submitted on four occasions and the other on six. Of the secondary schools one was submitted six times previously and another twice. The third is a new proposal.
The authority's last four building programmes included three new primary schools and two secondary schools.

Mr. Hale: Is the hon. Gentleman aware that this does not sound quite like the answer given a few moments ago about the immense amount of school building which is going on? Is he aware, however, that I am grateful for the first half of the letter from his right hon. Friend to me yesterday and for the hopeful assurance about the secondary school which that letter contains?

Mr. Hale: asked the Minister of Education what is the present estimated cost to the Exchequer of the proposed denominational primary school at Roman Road, Lineside, Oldham; and what was the estimated comparable cost when the proposal was first submitted for approval.

Mr. K. Thompson: This school was first proposed for the 1956–57 major building programme. The gross capital cost at that time would have been £47,432, compared with £54,863 today.
The cost to the Exchequer would depend upon the extent to which the project qualified for grant from my Department.

Mr. Hale: I am much obliged for the information, but is the hon. Gentleman aware that it discloses a rather serious state of affairs? If I rightly understand the letter from his right hon. Friend to me on this project, he is now saying that, having refused to see a deputation in May at my request, and having received the same deputation in my absence in June, without communicating with me, he now refuses to receive me, the bishop or the priest to make representations on the matter on the ground that he has received that deputation? Is that the case, or am I being asked to wait for further consideration?

Mr. Thompson: I am grateful to the hon. Member for his courteous reference to my right hon. Friend's letter in his previous supplementary question. I do not think my right hon. Friend's suggestion that it would not be advantageous to meet the hon. Member at this time is based on a refusal to see him because he has already seen a deputation. My right hon. Friend's letter suggests that it would be as well if the consultations now being carried out were completed. The hon. Member might rest on that for the time being.

Mr. Hale: I am much obliged.

National School of Film and Television

Mr. K. Robinson: asked the Minister of Education what discussions he has had with the Royal College of Art with a view to the establishment of a national school of film and television; what progress has been made; and if he will make a statement.

Mr. K. Thompson: No formal proposal has yet been made to my right hon. Friend, but representatives of the Royal College of Art and of the film and television industries have discussed a project of this kind several times with officers of the Ministry. I understand that the college and the industries are now considering several points arising from the most recent discussion, which was held last week.

Mr. Robinson: Is the hon. Gentleman aware that there is a serious need for a faculty of this kind and that we are almost the only major film-producing country without one? Is he further aware that this proposal will not be brought to fruition without the blessing of his right hon. Friend and his practical assistance? Will he press ahead with the matter?

Mr. Thompson: I accept pretty fully all that the hon. Member says.

Teachers

Mr. Willey: asked the Minister of Education what was the increase during the years 1959 and 1960, respectively, in the numbers of full-time teachers employed in maintained and assisted schools.

Mr. K. Thompson: The increase in the number of teachers in full-time service in maintained primary and secondary schools, excluding special schools, was 6,000 in 1959–60 and about 5,000 in 1960–61.

Mr. Wiley: Does the hon. Gentleman remember that his right hon. Friend told me last week that merely to reduce the size of over-sized classes by 1970, which is not a very ambitious target, we need between 73,000 and 80,000 new teachers? Does he realise that we cannot possibly attain this target unless his right hon. Friend does something about the crisis in the supply of teachers?

Mr. Thompson: The hon. Member will probably be aware of our programme for extending teacher training colleges, the growth in the size of the universities, and all the other efforts that we are making to recruit additional teachers.

Mr. Willey: Does the hon. Gentleman realise that that will do no more than meet the deficiency that will arise over the year of intermission for the next five to six years?

Mr. Thompson: The hon. Gentleman must not be so pessimistic. We have much higher hopes than that.

Day Training Colleges

Mrs. White: asked the Minister of Education how many day training colleges are now in operation; how many


candidates for admission were accepted; how many were refused; and where and when any further day training colleges are to be established.

Mr. K. Thompson: Five colleges, to which 574 students were admitted in the present academic year out of about 1,400 candidates interviewed. Three more day colleges in London, Wolverhampton and Newcastle-on-Tyne will open this September and will admit about 225 students. My right hon. Friend regards this expansion of day training as a most important development.

Mrs. White: While agreeing entirely with that last comment, may I ask whether the hon. Gentleman is not aware that it is now almost exactly a year ago that we were told of the three additional colleges which are still not opened'? Does not the hon. Gentleman feel that there might have been more speedy action in this matter, particularly to meet the need for short-term mature students' courses for the 1962 year of intermission?

Mr. Thompson: That is one of the objectives of this present expansion programme. It takes time to open and start new colleges, as I think the hon. Lady knows.

Mr. G. Thomas: Do I understand that the hon. Gentleman said that 500 out of 1,400 interviewed were accepted? Has he any information about what proportion of the remainder of the candidates were ultimately accepted for teaching? Were they lost to the profession?

Mr. Thompson: This information relates to the present academic year and I have no knowledge, therefore, of candidates who were not accepted.

EAST AFRICA

King's African Rifles (Officers)

Sir H. Lucas-Tooth: asked the Secretary of State for the Colonies how many officers are now serving on the general list, King's African Rifles; whether he is aware that these officers have been given no statutory right to pensions or gratuities; and when action will be taken to put an end to this unsatisfactory state of affairs.

The Under-Secretary of State for the Colonies (Mr. Hugh Fraser): There are now twenty-three officers serving in the general list K.A.R. A pensions and gratuity scheme for them is under consideration by the East African Governments and will be broadly similar to that in force for the Government servants of comparable status in East Africa. It is hoped that it will be possible to enact the necessary legislation in 1961.

Sir H. Lucas-Tooth: Is my hon. Friend aware that the delay is causing serious hardships to those concerned? Is he aware that one of the officers has been invalided home with his family and has been a year on full pay but without any lodging allowance or ration allowance, and that he has been told by the Government of Kenya that any question of pension or gratuity can be decided only on an ex gratia basis? Will my hon. Friend see that this matter is accelerated?

Mr. Fraser: Yes, Sir, I will, but I must point out to my hon. Friend that the ex gratia basis will be reviewed—in the officer's favour. The payment will be increased if the final decision is for an upwards move. If the final decision is less advantageous, the difference will not be deducted.

NORTHERN RHODESIA

Copperbelt Technical Foundation (Keir Committee's Report)

Mr. Dugdale: asked the Secretary of State for the Colonies what consideration he has given to the Report of the Keir Committee appointed to inquire into the future of the Copperbelt Technical Foundation; what action he proposes to take in the matter; and if he will make a statement.

The Secretary of State for the Colonies (Mr. Iain Macleod): The three sponsors of the Committee—the Copperbelt Technical Foundation, the Federal Government and the Government of Northern Rhodesia—have appointed a working party which is at present considering the Report and which will later advise on all its implications. So far as my responsibilities are involved I will of course give sympathetic consideration to whatever measures may finally be


recommended by the sponsors of the Committee.

Mr. Dugdale: Is it not the case that the Committee has recommended the abolition of the colour bar in all technical schools? If this is so, will the right hon. Gentleman do his best to ensure that that important recommendation is implemented?

Mr. Macleod: Northern Rhodesia has made tremendous strides, as the right hon. Gentleman knows very well, in the last few years in this matter. I am sure that the best way of proceeding is by the working party, which I have indicated, and as soon as we have its report we shall be able to try to implement it.

HEADS OF GOVERNMENT

Mr. A. Henderson: asked the Prime Minister whether, in view of recent developments, he will propose am early meeting between President Kennedy, President de Gaulle and himself on the problems of Berlin, Germany and central European security.

The Prime Minister (Mr. Harold Macmillan): We are in the closest touch with the Governments of France and the United States about these matters, but there are no plans at present for a meeting of Heads of Government.

Mr. Henderson: In view of the Prime Minister's own statements about the gravity of the German and Berlin problems following the memorandum from Mr. Khrushchev, would not the right hon. Gentleman agree that a Western Summit meeting is highly desirable in order to work out a common policy in relation to these problems?

The Prime Minister: At present these things are being done through diplomatic channels. We actually met not long ago. It would be quite easy, I think, to arrange a meeting if it were thought desirable.

Mr. S. Silverman: Does not the right hon. Gentleman agree that it is the height of folly to adopt a fighting attitude if one does not intend to fight, and that there are few people in this country or anywhere else who seriously consider that he would precipitate a nuclear war in order to negotiate with Russian

officials rather than East German officials access to West Berlin?

The Prime Minister: If the hon. Gentleman thinks that sums up the problem of Berlin, I think that he is under a grave misapprehension. The Question is simply about whether three gentlemen should meet or not.

FISHERIES

Mr. Hector Hughes: asked the Prime Minister, in view of the failure of British Government efforts to achieve international agreement on disputes relating to fishing territorial waters, if he will now appoint a Minister who will give his whole attention to problems relating to fisheries.

The Prime Minister: No, Sir.

Mr. Hughes: Does not the Prime Minister realise that food, agriculture and fisheries are three major industries in this country, and that they are far too much for one Minister to attend to and, therefore, for the last few years they have been hopelessly neglected, as is evidenced by the complaints made by the people in each of these industries? Will he reconsider his decision?

The Prime Minister: No, Sir. I do not think that we should gain by that administrative change. Moreover, with regard to international agreements, of course, whatever Minister deals with fisheries, that matter must largely be conducted by the Foreign Office.

Dame Irene Ward: Is my right hon. Friend aware that I support the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes), that in my opinion the agriculturists get far more support from the Treasury than the fishing industry does, and that I personally think that the fishing industry, which is related to a great many other problems besides fisheries, ought to receive more attention and more support from the Treasury and my right hon. Friend? Will my right hon. Friend kindly reconsider his decision?

The Prime Minister: I am, of course, impressed although not wholly convinced, by this combination.

PEACEFUL CO-EXISTENCE (FOREIGN SECRETARY'S SPEECH)

Mr. Warbey: asked the Prime Minister whether the speech of the Foreign Secretary to the Performing Rights Society on 29th June, on the need to strengthen peaceful co-existence, represents the policy of Her Majesty's Government.

The Prime Minister: Yes, Sir.

Mr. Warbey: As the Foreign Secretary has now come off Dr. Adenauer's high horse and indicated his readiness to consider a negotiated settlement of the problems of Berlin and Germany, will the Prime Minister follow suit? Will the Prime Minister recognise that in these days of nuclear weapons the posturing of a statesman can be highly dangerous to the peace of the world and the safety of the people of these islands?

The Prime Minister: What the Foreign Secretary was referring to in that speech, which I have read, was the need for peaceful co-existence, by which I think he meant good neighbour policies and not perpetual political and economic propaganda warfare. Peaceful coexistence, of which we all have some experience, can be either one or the other.

COMMON MARKET (COMMONWEALTH CONSULTATIONS)

Mr. Biggs-Davison: asked the Prime Minister when he expects Ministerial consultations with other Commonwealth Governments about the Common Market to be completed; what further action will be taken to ensure continued consultation with these Governments on future relations with continental Europe; and if he will make a further statement about Her Majesty's Government's policy with regard to the European Economic Community.

The Prime Minister: I expect that the United Kingdom Ministers will have concluded their visits to Commonwealth capitals by about 17th July. One of the matters included in the present discussions is naturally that of further consultation.

Mr. Biggs-Davison: Has not what we have already heard of the Ministerial consultations revealed the anguish throughout the Commonwealth at the possibility of any European arrangement which might weaken the ties between the oversea Commonwealth and Britain? In view of the necessity for the utmost Commonwealth and national unity in the face of threats to peace in the Middle East, Berlin and elsewhere, could not Her Majesty's Government seek to postpone a decision until there has been some relaxation of tension in the world and time to call a full Commonwealth Conference on this vital matter?

The Prime Minister: I take note of what my hon. Friend has said, but I would really prefer to await the possibility of discussing this matter with my colleagues when they return.

Mr. Shinwell: In view of the right hon. Gentleman's speech the other day, when he appeared to be soft-pedalling on this issue, and in view of the poor response met by the travelling Ministers, is it not about time that the Prime Minister scrapped this foolish idea?

The Prime Minister: The right hon. Gentleman is entitled to his views, but I really think that he takes this great issue rather too lightly.

Mr. Lindsay: Are there not a large number of outstanding Commonwealth statesmen, Mr. Menzies and Lord Casey, for example, who have expressed full understanding of the British position and confidence in the way in which we shall handle the matter?

The Prime Minister: Yes, Sir. I think we really must be careful to try to treat the matter in as statesmanlike a way as we can and neither to exaggerate the difficulties nor to underrate them.

Mr. Healey: As Her Majesty's Government last week agreed at the E.F.T.A. Council meeting that they would not conclude any agreement with the Common Market countries until all the other members of E.F.T.A. were prepared to conclude their agreements with the Common Market countries, can the Prime Minister give an assurance to the House that Her Majesty's Government will not conclude an agreement with the Common


Market countries until all the Commonwealth Governments have given their consent to such an agreement?

The Prime Minister: I do not know about consent to every detail, but the question that we have first to consider is whether and on what basis the negotiations should begin. That is really what has to be discussed; and as a final stage, of course, the consent of the House and many other consents will have to be given.

BERLIN

Mr. Emrys Hughes: asked the Prime Minister when he proposes to visit Berlin, in view of the increasing tension there.

The Prime Minister: I have no present plans for visiting Berlin.

Mr. Hughes: Does the Prime Minister realise that a fresh approach is needed to the problem of Berlin, and that it would be a good thing if he went there himself and took Field Marshal Lord Montgomery there to advise him? Is he aware that Lord Montgomery has warned us that it is only a hope that the West can use military measures to keep open its communications with Berlin without being involved in a military clash with the Russians, which would result only in all-out nuclear war? Does not the Prime Minister think that it would be worth his while going to Berlin if he could ease the tension and stave this off?

The Prime Minister: I was rather wondering what the supplementary question would be. It is possible to meet Field Marshal Lord Montgomery without going to Berlin.

Mr. P. Williams: Would not my right hon. Friend agree that the future of Berlin and of Europe is as important to Britain and the Commonwealth as is the question of the Common Market, and that the Commonwealth Prime Ministers ought to be called together for a consultation to decide what the action of Britain and the Commonwealth should be about both the Common Market and Berlin?

The Prime Minister: We are always in the closest consultations with

the Prime Ministers of the Commonwealth. Whether it would be possible to have another meeting of Prime Ministers, and when, is a matter that must be arranged by general convenience. That does not preclude constant—daily, almost—communications between us.

BUSINESS OF THE HOUSE

Mr. G. Brown: May I ask the Leader of the House whether he will state the business of the House for next week?

The Secretary of State for the Home Department (Mr. R. A. Butler): Yes, Sir. The business for next week will be as follows:

MONDAY, 10TH JULY—Supply [19th Allotted Day]: Committee.

A debate will take place on Science, on the appropriate Votes.

TUESDAY, 11TH JULY—Supply [20th Allotted Day]: Committee.

A debate on the National Health Service in England and Wales.

Consideration of the Motion to approve the Parking Places (Extension outside London No. 3) Order.

WEDNESDAY, 12TH JULY—Debate on Welsh Affairs.

The subject of Leasehold Reform in Wales will be debated on an Opposition Motion until seven o'clock.

Afterwards, a debate on Employment of Disabled and Elderly Persons in Wales, on the Report on Developments and Government Action in Wales and Monmouthshire, 1960.

THURSDAY, 13TH JULY—Supply [21st Allotted Day]: Committee.

A debate on Shipping and Shipbuilding.

Consideration of the Motion to approve the Potatoes (Guaranteed Prices) (Amendment) Order.

FRIDAY, 14TH JULY—Consideration of the Motions to approve the White Fish and Herring Subsidies (United Kingdom) Schemes and Orders.

If there is time, Second Reading of the Suicide Bill [Lords].

MONDAY, 17TH JULY—The proposed business will be Supply [22nd Allotted Day]: Committee.

A debate will take place on Education.

Mr. M. Foot: As the Leader of the House has not stated that there will be a debate about the situation in Berlin next week, can he give the House an assurance that there will be a full debate on it before the House rises for the Summer Recess?

Mr. Butler: No, Sir, I cannot give any such guarantee, but, naturally, I will discuss the matter with my right hon. Friends principally concerned.

Mr. Nabarro: My right hon. Friend the Prime Minister announced a few minutes ago that it was expected that the consultations with the Commonwealth Prime Ministers and others would be completed on 17th July. That is nearly three weeks before this House rises for the Summer Recess. Can my right hon. Friend say whether it is the Government's intention to allow full facilities for a Common Market debate, which we have not had, either in Government time or on a Supply Day, since 21st November, 1956?

Mr. Butler: I have received a communication from some of my hon. Friends and some Members opposite, urging that this matter should be discussed. It is too early to make a decision until my right hon. Friends who are now visiting Commonwealth countries have returned and we have some idea of what they will report.

Mr. Wigg: Why are we not to have an immediate opportunity of debating the situation in Kuwait? Is the right hon. Gentleman aware that already a grave situation, very like that at Suez, regarding shortages of equipment, has been revealed? Is he further aware that it is perfectly clear that the Prime Minister was not wholly candid with the House on Monday when he said that he took his decision to intervene last Friday? The Minister of Defence has admitted, in a Written Answer yesterday, that the "Bulwark" sailed from Karachi to Kuwait on Thursday, and that Centurion tanks were moving several days before that. When will the Government "come clean" and start trusting the British public with the truth?

Mr. Butler: I cannot accept the inferences in the hon. Gentleman's statement. Nor can I give an undertaking about a debate, but I will note that the request for a debate has been made.

Mr. Speir: Has my right hon. Friend noticed the Motion on the Order Paper relating to the problem of rural transport?
[That this House views with concern the continuing reduction of bus services in the rural areas of Great Britain, draws attention to the hardship imposed on the rural population by the disappearance of public transport facilities, believes that this will lead to the further depopulation of the countryside, and is of opinion that special steps are urgently necessary to ensure that adequate services are maintained.]
The Motion has received widespread support from hon. Members on both sides of the House and reflects the growing anxiety in the countryside at the continuing deterioration of public transport facilities. While I appreciate that it might not be possible to have a debate in the coming week, may I ask, in view of the importance of this problem to the well-being of the countryside, whether my right hon. Friend will try to arrange for a debate before the Recess?

Mr. Butler: I have noticed the Motion and its signatories. I cannot give any undertaking, in view of the amount of business there is to get through, that there will be time for a debate.

Mr. Darling: During the last two or three weeks the President of the Board of Trade has made statements in the House, in the form of Written Answers, about important matters, and we have not been able to question him about them. Can the right hon. Gentleman assure us that the President of the Board of Trade will make an oral statement about the Report of the Monopolies Commission on the tobacco industry, so that we can put questions to him?
The President of the Board of Trade could also give us some idea orally of his intentions with regard to the Weights and Measures (No. 2) Bill, so that we can ask him what it is to contain.

Mr. Butler: The best way to ascertain what that Bill is to contain is to await its


publication. That will make it quite clear. Publication will be during this summer.
As to the first part of the hon. Gentleman's supplementary question—all I can do at business time is to undertake to discuss it with my right hon. Friend the President of the Board of Trade.

Mr. P. Williams: Reference has been made to the possibility of a debate on the Common Market. Whether or not this is possible, can my right hon. Friend give an assurance that, whether we debate it or not, something will be done to include Commonwealth trade?
The debate to be held on Thursday on shipping and shipbuilding is obviously for the convenience of the House. Is my right hon. Friend aware that the House is grateful to the Government for having found time for this debate?

Mr. G. Brown: They did not. It is a Supply Day.

Mr. Williams: We are grateful that time has been found. The right hon. Member for Belper (Mr. G. Brown) must allow me to be polite. Can my right hon. Friend give an assurance that he would agree with the idea that the most satisfactory way of dealing with the debate would be, even at this late date, to withdraw the North Atlantic Shipping Bill?

Mr. Butler: No, Sir. There is no question of withdrawing that Bill. I am grateful to the Opposition for realising the sensitivity of the House and choosing shipping and shipbuilding for a debate, for it is very important that it should be discussed.
It is obvious from the tour by my colleagues that we attach the greatest importance to Commonwealth trade.

Mr. Glenvil Hall: When are we likely to get the Road Traffic Bill, in view of the increased toll of casualties on the roads?

Mr. Butler: I am not in a position to make a statement today.

Dame Irene Ward: Will my right hon. Friend, before the business on Friday of next week, convey to the Ministers con-

cerned that there are quite a lot of hon. Members from fishing ports who want to hook Ministers from the Treasury Bench because of the policies which the Government appear to follow towards the fishing industry? Will he please convey that to the Ministers concerned, so that they may come prepared?

Mr. Butler: I will convey verbatim to my right hon. Friends what my hon. Friend says.

Mr. S. Silverman: Referring to the question put by my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) about a possible debate on the German and Berlin situations, has the right hon. Gentleman's attention been called to a Motion on the Order Paper which my hon. Friends and others, including myself, have signed?
[That this House views with increasing distress the deepening crisis in Europe concerning Berlin, declares its conviction that there are no factors in the situation which are not capable of being resolved by negotiation conducted in good faith, deplores therefore the unnecessary bellicosity with which the controversy is being conducted, declares that the de facto recognition of East Germany can no longer be reasonably withheld, and calls upon Her Majesty's Government to take a positive and constructive initiative to end the present anomalous status of Berlin and place the independence of the inhabitants of West Berlin and free access thereto not upon the obsolete military occupation clauses of the Potsdam agreement but upon the firm and stable foundations of treaty rights negotiated in the light of the realistic facts.]
Does the right hon. Gentleman realise that the present indications are that this situation may become very acute indeed, with all the consequences that are inherent in it, at a time when Parliament is not sitting? Does not this make it necessary that he should go a little further than he went in his answer to my hon. Friend and give an undertaking that, if he cannot find time for this Motion, he will find some other opportunity when these issues can be debated?

Mr. Butler: Nobody will deny the seriousness of the situation in relation to Berlin. I can only assure the hon. Gentleman and the hon. Member for


Ebbw Vale (Mr. M. Foot) that this matter is under constant review by Her Majesty's Ministers. While I cannot give any assurance today, I can give him the undertaking that this matter will be kept very much under review.

Mr. Ridsdale: In view of the serious economic situation which confronts us, can my right hon. Friend say when we may have an opportunity of speaking a little more widely about the economic situation than is possible on the Third Reading of the Finance Bill?

Mr. Butler: The latitude of debate on the Finance Bill is a matter for the Chair. I cannot go any further today than I have already indicated.

Mr. G. Brown: Does the right hon. Gentleman recall that my right hon. Friend the Leader of the Opposition last week asked the Government for an assurance that there would be a foreign affairs debate before the House rises in a month's time? Will he also bear in mind that we also think that there should be a debate on the economic situation before the Recess?

Mr. Butler: Yes, Sir. I will note those requests.

Sir A. V. Harvey: Will my right hon. Friend bear in mind that particular reference should be made to a debate on exports, to bring their situation home to industry before the Recess? Is he further aware that the delivery dates of British goods nowhere match those of most of our competitors and that something must be done about it?

Mr. Butler: Yes, Sir. I think that this would be included in any reference to the economic situation.

Mr. Stonehouse: Is the Leader of the House proposing to find time for a debate on the proposals for the Northern Rhodesia Constitution, in view of the serious situation now developing because the Colonial Secretary has gone back on the original proposals and has gone back on the assurances which he gave to Mr. Kaunda?

Mr. Butler: I cannot accept the implication of the hon. Member's question, and at present I have no statement to make about a debate.

Mr. Shinwell: Does the right hon. Gentleman know of any precedent, cer-

tainly within the last thirty or forty years, for forces being built up for the purpose of resisting a threatened aggression, in the manner in which they have been built up in Kuwait, without the Government affording facilities for a debate? Can he recall what happened over Korea and over Suez? Is it not desirable that the House should have an opportunity of gaining all possible information as to the reasons why forces have been built up in this fashion, and to be able to express an opinion?

Mr. Butler: All I can do is to undertake to discuss these matters with the Prime Minister and the Ministers principally concerned.

Mr. Thorpe: Reverting to the question put by the hon. Member for Wednesbury (Mr. Stonehouse), is the Leader of the House aware that when I asked him last week about the possibility of a debate on the Northern Rhodesia Constitution he was rash enough to say that he would go so far as to bear the matter in mind? Is he aware that this afternoon he merely said that he could not make a statement? Can he not revert to the position which he adopted last week? Will he bear in mind that this is a territory for which the House is responsible and that this is a matter which is being debated at large in Central Africa? Will he try to provide an opportunity for the House to discuss this new situation before we rise for the Summer Recess?

Mr. Butler: I cannot give any undertaking, but I can certainly revert to the language of last week.

Dr. King: Has the right hon. Gentleman seen a Motion in the name of his hon. Friend the Member for Barry (Mr. Gower), asking the Government to introduce a workers' charter? In its General Election manifesto of 1950, the Conservative Party said:
One of the first tasks of a Conservative Government would be to bring into operation the Workers' Charter adopted as the policy of the party in 1947.
Could we not have an opportunity, at an early date, to discuss the Motion?
[That this House calls upon Her Majesty's Government to introduce legislation, at an early date, to implement the main proposals of the Workers' Charter; and to incorporate therein, in the light of


present circumstances, such additional measures as may enhance the dignity and status of the employee in industry.]

Mr. Butler: I do not think that there will be an opportunity. In any case, these matters are being discussed by my right hon. Friend with those principally concerned.

Mr. Roy Jenkins: Can the Leader of the House tell us when the Chancellor of the Exchequer is likely to introduce his restrictive economic measures—next week, or later in July?

Mr. Butler: I cannot accept the statement of the hon. Gentleman. Nor have I any further statement to make at the moment.

Mr. Speaker: We must confine this time to business questions. It has become disorderly.

Mr. M. Foot: Does the Leader of the House agree that, from the questions put to him, it appears to be the consensus of opinion in the House that the four most important questions facing the country are the position in Berlin, the position in Kuwait, the position in Africa, and the Common Market, not to mention the economic crisis? Are we to attribute to the right hon. Gentleman's brilliant skill the fact that no arrangements have been made for discussing any of them?

Mr. Butler: The hon. Gentleman should feel satisfied that all these matters are obviously of very great importance. There will, no doubt, be an opportunity for discussing them, if there is time, in relation to the importance of the issues. At present, we are making headway with Supply, for which there are several outstanding days, and I think that we are satisfying the wishes of the Opposition in taking the subjects which they have put forward.

TANGANYIKA (INDEPENDENCE)

The Secretary of State for the Colonies (Mr. fain Macleod): I will, with permission, make a short statement on the date of Tanganyika's independence.
As the House is aware, the date of Tanganyika's independence has been announced as 28th December, 1961. The

Prime Minister of Tanganyika has represented to me that this date could prove inconvenient, particularly for representatives and guests from abroad, and I am glad to inform the House that by agreement between Her Majesty's Government and the Tanganyika Government it has proved possible to advance the date to 9th December. Accordingly, Her Majesty's Government will propose to the General Assembly of the United Nations, in the autumn, that the Trusteeship Agreement be terminated at the earlier date.
I am further very glad to be able to inform the House that Her Majesty the Queen has been graciously pleased to appoint His Royal Highness The Duke of Edinburgh to be her representative at the independence celebrations in Tanganyika.
His Royal Highness will go to Tanganyika immediately after the Queen's visit to the Gambia.

Mr. Marquand: Is the right hon. Gentleman aware that we on this side of the House warmly welcome the appointment of the Duke of Edinburgh as Her Majesty's representative as a recognition of the high importance of this very happy occasion? Is he further aware that we are glad that a mutually convenient date has been agreed? May I assume that at a later date an announcement will be made about representation of this Parliament at the celebrations?

Mr. Macleod: I join with the right hon. Gentleman in expressing pleasure at the appointment by Her Majesty the Queen of His Royal Highness to be present in Tanganyika. It is possible because of the Royal visit to Africa at that time, and it will give great pleasure to the Prime Minister and the people of Tanganyika that it should be so.
On the other matter, an appropriate announcement will be made later.

ANGOLA (TELEGRAM)

Mr. Speaker's Ruling

Mr. Healey: I have given you notice, Mr. Speaker, that I would raise with you at today's sitting your Ruling in yesterday's debate on Angola, consequent on my point of order that in quoting what


he called a short portion of a telegram which he had received from the Consul-General in Luanda the Minister of State was contravening the rule of the House which is set out on page 460 of Erskine May.
May I ask you whether you have had an opportunity of consulting the precedents and reconsidering your Ruling on the point which I raised?

Mr. Speaker: I have. I am much obliged to the hon. Member for Leeds, East (Mr. Healey). If the House will allow me, I had better restate the very good statement of the rule which my immediate predecessor gave on 11th December, 1957. I abstract from his Ruling, his statement of the rule:
For the House to be able to demand that documents should be laid upon the Table, three conditions must be fulfilled.
In the first place, the Minister must have quoted from the document; it is not sufficient that he should have referred to it or even to have summarised or paraphrased it in part or in whole.
Secondly, the document must he a 'despatch or other State paper'; the rule cannot be applied to private documents.
Thirdly, the rule cannot be applied to documents which are stated by the Minister to be of such a nature that their disclosure would be inconsistent with the public interest."— [OFFICIAL REPORT, 11th December. 1957; Vol. 579, c. 1266–7.]
I hesitated yesterday because the Minister was reading from a telegram passing between the Consul-General in Luanda and the Minister. I confess to being momentarily puzzled as to whether that could properly be described as a despatch, a word about which there is a kind of eighteenth century solemnity. But, pondering the matter and looking at the precedents, I think that it is. After all, on these days most despatches would, suppose, be sent by telegram.
I could not resist noticing, when studying the use of the English language, that there is a valuable precedent, namely, that on 18th January, 1945, when the right hon. Gentleman the Member for Woodford (Sir W. Churchill) said:
Let me now read an extract from a despatch from our Ambassador …
and, after being pressed to lay the telegram on the Table, he concluded with the words:
With regard to this document, I think I should be quite right to lay the telegram …"—[OFFICIAL REPORT, 18th January, 1945; Vol. 407, c. 408–9.]

Reflecting on that use of language, I thought that it would not be right, in modern times, to distinguish between a telegram and a despatch in these circumstances.
My conclusion, therefore, on consideration, is that the Minister is bound to lay the telegram from which he quoted, unless he says that he is within the third limb of the rule, namely, that the document is of such a nature that it would be inconsistent with the public interest to disclose it.

Mr. Healey: I thank you very much for your Ruling, Mr. Speaker. May I take it that the Government will lay the document on the Table?

The Minister of State, Foreign Office (Mr. J. B. Godber): Perhaps I might make a short statement on this, Mr. Speaker. I quoted from this document because I thought that the information which I gave would be of use to the House. Unfortunately, in doing so, I failed to foresee that there would be a demand for the publication of the document in full.
I now freely admit that I should have given the sense of the information, and that I was quite wrong to quote it verbatim. I trust that the House will accept my full apology for this error, and my regret that I have to say that I am advised that it would not be in the public interest to publish the telegram in full.

Hon. Members: Oh.

Mr. Healey: I appreciate very much the apology which the hon. Gentleman has made, but may I ask you, Mr. Speaker, whether the House can be permitted to leave the matter there? After all, the quotation which the hon. Gentleman made from this document received very wide publicity today both on the radio and in the national and international Press. Indeed, in many cases it was the only quotation made from the hon. Gentleman's speech.
The whole purpose of the rule is that the Government should not be permitted to mislead public opinion by partial and selective quotations from documents. Is it really within the rules of the House that the Government, having already made a partial and selective quotation, should be permitted to evade the rule n this way?

Mr. Speaker: The hon. Gentleman addressed me. I read out in full the rule as stated by my predecessor so that there should be no misunderstanding. As I conceive it, when the Minister says that the document is one the contents of which it would not be consistent with the public interest to disclose, he takes responsibility for that statement. I cannot, from this angle, carry the matter further.

Mr. G. Brown: I am sure that the whole House will understand and sympathise with the Minister of State in his personal difficulty, and that we all appreciate the emotion under which he made his statement. However, that does not seem to end the matter. The statement which the Minister made must have been made for the Government as a whole.
The Leader of the House is here, so may I now put a question to him on the claim made by the Minister that the Government regard this despatch as containing information which makes it impossible for them to lay it on the Table. The Leader of the House will recall that yesterday we were given a very lengthy quotation indeed. It therefore can only appear to the country and to us that if it is claimed that the rest of the telegram makes it so confidential that it cannot be disclosed, there is a prima facie case for believing that the rest of the telegram contains information which makes that part of it which was quoted out of keeping with the context.
In those circumstances, the unfortunate mistake, if the Minister of State likes to put it that way, having been made, would it not be very much more in keeping with everybody's standing in this, and in keeping with the desire not to leave the country with the feeling that it has been misled about this, if the Leader of the House went the whole hog and laid the telegram on the Table?

Mr. S. Silverman: The Leader of the House has been asked a question which, I hope, he will answer, but may I put a further point of order to you, Mr. Speaker, in relation to what the Minister said? This is a document from which the Foreign Office and the Government must have decided to quote yesterday. They must, at that time, have

considered all the consequences, including this consequence.
The Minister of State and the Lord Privy Seal did not yesterday claim to be protected from laying the document on the ground which is now claimed. Is it really open to the Minister at this stage, having been defeated on the first defence, to withdraw that and put forward something else in view of the Ruling which you gave today which he did not anticipate yesterday?
Is it not an abuse of the rules for him now, 24 hours later, to claim a protection which was open to him yesterday, if it is open at all, and which he did not then make? The document has gone out. It has been the subject of debate. It has been the subject of world-wide report. Is he now entitled to claim that the document is protected in the way that he would now like to rely on?

Mr. Speaker: Yes. I think that on the rule that I read out to the House he may assert this at any time. I do not want to put this with any implications on it. On the face of the assertion which the Minister makes on his own responsibility, on one view it is his duty to make it.

Mr. Woodburn: On a point of order, Mr. Speaker. Will the right hon. Gentleman consider the implications of what has been said in regard to this rule?

Mr. Speaker: This is not a point of order, is it? I think that the right hon. Member is asking whether a right hon. Member will consider something. I do not think that that can be for me.

Mr. Woodburn: I am asking whether the rule as stated by you, and by your predecessor, does not make nonsense of what was previously understood to be the implications of this rule, namely, that if a Minister quoted from a document it ought to be read in full? Obviously, any Government would consider the public interest to be the interest of the Government at the same time.

Mr. Speaker: I believe the rule to be stated correctly by my immediate predecessor, and I adopt it in its entirety.

The Secretary of State for the Home Department (Mr. R. A. Butler): I am sure that the House will sympathise with my hon. Friend the Minister of State, who has stated clearly the position in


which he found himself, and has expressed regret for quoting from the document.
The point made by the hon. Member for Nelson and Colne (Mr. S. Silverman), in a point of order to you, Mr. Speaker, can, I think, be answered by the fact that my hon. Friend the Minister of State was under the impression that a Ruling had been given by you and, therefore, did not pursue the matter last night. Since then there has been an opportunity of considering this matter, and I can say that the statement made by my hon. Friend the Minister of State represents the views of the Government.
The Government examined this matter this morning. We have not relied on your immediate predecessor's Ruling, which I have here, namely, the third limb, that the rule cannot be applied to documents which are said by the Minister to be of such a nature that their disclosure would be inconsistent with the public interest.
We rely on the Ruling given on page 461 of Erskine May by Mr. Speaker Peel on 10th August, 1893, when he ruled that
confidential documents or documents of a private nature passing between officers of a department and the department, cited in debate, are not necessarily laid on the table of the House, especially if the Minister declares that they are of a confidential nature.
I am declaring, on behalf of the Government, that we regard this as being of a confidential nature.
This whole matter was raised in a debate in column 1865 on 31st May, 1938, by the then Mr. Wedgwood Benn. He quoted the same Ruling of Mr. Speaker Peel, and the then Chairman, Sir Dennis Herbert, in supporting the Ruling, supported generally the lines of Mr. Speaker Peel's Ruling in 1893.
I have to state, on behalf of the Government, that we consider that we are fully covered by the statement in Erskine May, by the statement, in particular, by Mr. Speaker Peel, and by the statement of your predecessor. It would not be in the public interest to publish this document, as it is a document of a confidential character. Moreover, I think that it would be impossible to conduct the business of the House or of Parliament if private and confidential docu-

ments from emissaries overseas were laid before the House.
My final remark is in relation to the statement made by the right hon. Gentleman the Member for Belper (Mr. G. Brown). I agree that there must be an element of doubt in any issue such as this, but my hon. Friend has made a full apology for quoting from the document. I deny that there is anything in the document which is in any way contradictory in the form to which the right hon. Gentleman referred.

Mr. Healey: Mr. Speaker, I fully accept your Ruling in regard to the Government's right to invoke this rule to defend their action, but may I put it to you and to the House that the Government's refusal to publish the document as a whole, after making a tendentious quotation from it, will confirm the view which, I think, is held by all of us on this side of the House, that this quotation was introduced in this shoddy and underhand way to give a completely false impression of the situation in Angola?

Mr. S. Silverman: Has not what the Leader of the House said just now made confusion worse confounded? Having yesterday claimed protection on one ground, and having been driven from that today to another ground, stated by the Minister of State, the Leader of the House now states a third ground, quite different from the other two. He appears to have assumed that a document of a confidential nature is necessarily one which should not be disclosed, because it would not be in the public interest to do so. That is a complete confusion.
The House is now in the position of having been offered three different and to some extent mutually exclusive reasons for non-disclosure. Does not what the right hon. Gentleman has said impugn the accuracy of any claim such as the one made by the Minister of State before the Leader of the House intervened?

Mr. Speaker: That is not a point of order. As I have explained, assuming that a Minister takes the responsibility of stating that a document is of the kind the contents of which it would not be in the public interest to disclose, that is, as I understand it, under the rule a reason for non-disclosure. There would


be an additional reason if the document were one which fell within the class described in the Ruling of Mr. Speaker Peel, which the Leader of the House cited. I did not know that the document was of that class until the Leader of the House took the responsibility of saying that it was, but under the Ruling of Mr. Speaker Peel—which I would desire to follow—that would be an additional reason for saying that the Ruling which my immediate predecessor laid down applied in the circumstances.

Mr. Thorpe: Is not this an extraordinary position, Mr. Speaker? As I see it, you were asked whether you would give a Ruling, which you gave, and which the House, naturally, accepts. The Leader of the House then rose and gave what, in effect, was his own independent ruling. Apparently, he decides which cases are in pari material with the present one. He gave a series of precedents quite different from those which you have sought to rely upon for your judgment, and which are the grounds upon which, if I heard him aright, the Government base their case. Is not this an extraordinary state of affairs, in which your judicial duties, laid upon Mr. Speaker by the House, are being arrogated by the Leader of the House to himself?

Mr. Speaker: I do not think that that is fair. I do not so regard it. I told the House the Ruling upon which I was going, which was applicable to what I knew about the document, in so far as I knew anything, which is what the House knew. Had I known of this additional feature I should have taken account of the additional Ruling. I do not think that there is any impropriety in the Leader of the House quoting the other Ruling. I had looked at that Ruling; indeed, I have it recorded in my note here. But I did not know that it was of importance in the context of this document. The Leader of the House knows what is in the document, and I do not.

Mr. G. Brown: So many different statements are being made by the Government that we do not know which leg they are standing on. Among others, the Leader of the House has slipped in his definition of the standing of a consul-general and what an officer of the

Department is. I wanted to put one point to the right hon. Gentleman. Does he realise the impossible situation in which he is putting us? Nobody wants to hound a Minister who has made a mistake—which can happen to any one of us—for which he has fully apologised to the House. The sense of other Members is to leave that in an understanding and friendly way. But if the Leader of the House then persists in claiming all kinds of afterthoughts for the non-fulfilment of what, in the ordinary way, should have followed that slip, we are in the situation when we must either seem to be hounding an unfortunate Minister or losing rights of the House which have been protected for a very long time.
The Leader of the House has said that he considers this document to be one whose disclosure would be inconsistent with the public interest. Will he reconsider that statement, with every intention of erring on the side of laying it this time, if he possibly can, in order to help the House through its difficulty? If he persists in his present attitude, will he tell us what issue of public interest is involved? [HON. MEMBERS: "Why?"] For this reason, that the quotation had to do with conditions in Angola and their effect on Portugal. If it was in the public interest for that part to be quoted or referred to, it cannot be against the public interest for another part of the telegram, which also deals with conditions in Angola, to be quoted.
I therefore ask the right hon. Gentleman to reconsider this matter and to realise that the House cannot let this matter go like this. We shall have to consider returning to it if the right hon. Gentleman persists in his view. It places the House and the Minister of State in an uncomfortable position. Will the right hon. Gentleman have another look at it and do his utmost to lay this document, unless there is an overwhelming reason against it—which I doubt?

Mr. Butler: I am following a well-established precedent which is well known to Governments, including the Government in which the right hon. Member served, namely, that if a document is confidential it is not suitable to lay it. This document, which was from an agent of Her Majesty's Government, is confidential, and is covered by the


Ruling of Mr. Speaker Peel in 1893. This is a locus classicus for deciding whether a document should be published. It is not usual for Governments to give reasons why they consider a matter is not in the public interest, or is confidential. I am sorry that I cannot go further. I am not being discourteous to the right hon. Gentleman or to the House, but I am following a well-established precedent and preserving the prerogative of the Government in a matter of this sort.

Mr. Gordon Walker: I hope that you will not allow a change in this Ruling to be smuggled in by the right hon. Gentleman the Leader of the House, Mr. Speaker. In effect, he has argued that a consul-general comes under the category of officials of a Department communicating with the Department. If that were true, and allowed to go without challenge, the quotation that you made from a statement of the right hon. Member for Woodford (Sir W. Churchill), applying to a despatch or telegram from an ambassador to the Foreign Office—which is exactly corresponding to a despatch from a consul-general to the Foreign Office—would naturally apply.

Mr. Speaker: I can probably save time. I am not in this instance ruling—I will rule when the occasion arises—that this document falls within that class. I do not know enough about it. I do not desire to give a Ruling on it at the moment. I have ruled, in what I said formerly, exactly in the terms of the Ruling stated by my immediate predecessor, which, in its practical result, is the same for this purpose.

Mr. M. Foot: What are the precedents in a case where the Government have grossly abused the procedure of the House? That is what has happened in this case. The Government have quoted a document which they now say they should never have quoted. [HON. MEMBERS: "No."] That is what the Leader of the House said. Can you say, Mr. Speaker, whether in such a case—where the Government have so grossly abused the procedure of the House—they have not on previous occasions made an effort to explain why they will not publish the rest of the document? They themselves decided to publish so much of it.

Mr. Speaker: I do not know of a case in which, a Minister having said that it was not consistent with the public interest to publish a document as a whole, it has not been accepted by the House. I know of no such instance.

Mr. Fletcher: On a point of order—

Sir Harmar Nicholls: Quite apart from the technical point whether or not this is a comprehensive document, can yqu say a further word about one of the points made by the right hon. Member for Belper (Mr. G. Brown)—

Mr. Speaker: I will hear the point of order first.

Mr. Fletcher: Can you help the House in this very difficult situation, Sir? I have heard all the interchanges, and it seems to me that there is a complete inconsistency between what the Leader of the House has said this afternoon and what the Minister of State said yesterday. Today, the Minister of State is alleging that this is a confidential document. The Minister of State made use of this document in asking the House to come to a certain conclusion yesterday, and he not only quoted a lengthy extract from it, but he went on to say—

Mr. Speaker: Can the hon. Member indicate the point of order on which he is addressing me?

Mr. Fletcher: The point of order, Sir, is that I should like to know how the House can deal with a situation in which, on the face of it, there is a complete inconsistency in the statements made by the Leader of the House and the Government in making the claim that this is a document which it is not in the public interest to disclose. In support of my point of order, I would draw your attention to the fact that yesterday, having quoted from the document, the Minister of State said:
This is a factual report from our representative in Angola and it is entitled to the respect of this House,"—[OFFICIAL REPORT, 5th July, 1961; Vol. 643, c. 1525.]
They were the Minister's words.

Mr. Speaker: That is not a point of order. To ask how the House should deal with something cannot be a point of order.

Mr. Fletcher: If it is not a point of order, may I put it in this way, that


it would seem to be a point on which the House is entitled to a further explanation from the Leader of the House?

Mr. Speaker: That means that it is not a point of order, does it not?

Mr. S. Silverman: In considering what reasons are offered by the Government for not following what otherwise would be accepted as the rule, namely, that there is something against the public interest in publishing the document, we must, of course, accept that the protection claimed was claimed in good faith. If it was not, it would lose all validity.
We have, as has been pointed out by my hon. Friend the Member for Islington, East (Mr. Fletcher), the Minister's own description of the document yesterday before we had the advantage of listening to your Ruling on the point today, Mr. Speaker. On that occasion he was saying:
This is a factual report from our representative in Angola and it is entitled to the respect of this House."—[OFFICIAL REPORT, 5th July, 1961; Vol. 643, c. 1525.]
It would seem, therefore, to follow that he disclaimed expressly yesterday either anything confidential—because he was saying that it was entitled to the respect of the House—or anything that ought to be withheld in the public interest—because he said that it was a factual report which the House ought to respect.
It seems, therefore, that on his own statement yesterday, which is entirely inconsistent with what he said today—and entirely inconsistent with what the Leader of the House said today—he expressly waived every one of the grounds of protection on which he is now relying. I submit, with respect, that it is impossible to exclude from our consideration of this matter the fact that the claims now being made—and the claims now being made are not the same—are all made after you have reconsidered the Ruling that you gave yesterday, and are obviously so framed as to claim the benefit of exception to which you have drawn their attention.
Is it not clear that the claims are made now not in the public interest at all, and not on the ground of any confidential need, but because it is incon-

venient for the Government to disclose the whole report? Is that the right way to interpret the Ruling?

Mr. Speaker: Suppose that on a suitable Motion that kind of proposition were to be debated, no doubt the hon. Gentleman and others could assert their views and be answered. It is not a matter for me. I accept that a proposition is put forward in good faith. I have no other alternative.

Mr. G. Brown: Would you, Mr. Speaker, allow me to put one short question to the Government which might help to clear up this matter? Will the Lord Privy Seal tell the House, did he know of the intention of his hon. Friend the Minister of State to quote this document before his hon. Friend rose to make his Speech? Did he—the Lord Privy Seal—know that that was to be done?

Hon. Members: Answer.

Mr. Speaker: Order. I do not think that I should be performing my duty if I allowed that question, or that kind of question, to be asked now. We are long past Question Time. I have ruled, and the House has heard the claim made, and it knows its consequences on the basis of my Ruling. Points of order I should be willing to hear, of course, if they help, because I must. But I do not think that I should be in order in allowing further cross-examination of Ministers.

Mr. Brown: On a point of order. This did not begin, nor is it wholly concerned with, a point of order arising out of a Ruling by you, Mr. Speaker. We have a statement by the Minister—

Sir K. Pickthorn: This is not a point of order.

Mr. Brown: Yes.
We had a very weighty statement made by the Leader of the House, in which he told us of the Government's consideration this morning and of the stand taken by the Government as a result of that; and he offered a statement of Government policy on this matter. The subsequent conduct, it is true, has become mixed up between questions arising out of the Minister's statement and points of


order arising out of a Ruling by you. Both have been running. There has been no point at which one stopped in order that the other might go on—

Mr. Speaker: Order. I think that there ought to be, if that is so. We must try to preserve the distinction between matters for me and matters which otherwise arise.

Mr. Brown: May I finish my point, Sir?
With respect, my submission to you is that, having had the Government statement, and no distinction between that and the other, we ought to be able to ask supplementary questions arising out of that as to which Minister, in fact, takes responsibility here—if I may finish my submission before you rule.
There is a great difference in whether or not the senior Foreign Office Minister present—we have no Foreign Secretary in this House, which is part of the problem—knew in advance that the quotation was to be made. If so, the defence of an accident by a less important Minister is no longer open to the Government. I submit to you, Mr. Speaker, that to help us to judge this you ought to permit one of the Ministers to answer, and say whether this was known by the Lord Privy Seal in advance.

Mr. Speaker: I think, with respect, that there is a little confusion. The Minister makes his claim on a public requirement that he should not disclose —senior, junior, any Minister, he makes it. From my point of view, I have to accept it as made in good faith, and operate the rule. Once that has happened I see no opportunity at all for conducting a discussion on what somebody knew about before or since; or who is responsible. It is on that declaration by the Minister that the third limb of the rule is brought into operation. I cannot escape from that so far as I can see.

Mr. Mitchison: On a point of order, Mr. Speaker. I fully appreciate that on the statement by the Minister you could not inquire into the question whether or not it was in the public interest to disclose the document in question. And the Minister, in making that statement, as I think you yourself indicated, was speaking on behalf of the Government. He was, however, followed by the

Leader of the House, who really put the claim not to disclose the document on a different ground and a different Ruling.
The Leader of the House said that this was a Departmental document of a confidential nature; that is to say, that it was the character of the document and not the contents of the document on which he relied. In those circumstances, surely we are entitled to be told what is the position about confidential documents of this kind. Is it open to the Government to waive the right to hold back a document, or are they in every case bound to say, "This is a confidential Departmental document, and on that ground alone we cannot disclose it"?
I ask the question because there was an apparent inconsistency between what was said on behalf of the Government by one Minister, who said it was the contents of the document and the public interest that mattered, and the statement of the other Minister, who said that it was not the content of the document, that it was the fact that it was a Departmental document of a confidential character which is the right basis.

Mr. Speaker: I am a little wary of relying on my recollection of what has been immediately said on these occasions. I discovered the other night that I had used the word "trickery" when I did not know that I had—in some other context. Therefore, I do not want to quarrel with the hon. and learned Gentleman's recollection.
Standing here at the moment, I should not be prepared to say that the case which the Leader of the House was developing was not that there was additional ground for objection rather than a different ground for the statement of objection. On that basis—I do not wish to use a discourteous word—it is something which is academic from the point of view of the Chair; because one answer appearing to be sound must be sufficient for the Chair under the rule. I cannot take the matter further at this stage. Hon. Members must take other steps.

Mr. Dugdale: In view of the great importance of this matter which you, Mr. Speaker, have said we cannot discuss by means of question and answer, and in view of the importance


of the Minister making a statement, I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
the refusal of the Minister of State for Foreign Affairs to lay upon the Table a document from which he quoted a portion in the House of Common".

Mr. Speaker: The right hon. Member asks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
the refusal of the Minister of State for Foreign Affairs to lay upon the Table a document from which he quoted a portion in the House of Commons".
I am wholly precluded by precedent from acceding to that application. Refusal of information is not a ground for moving the Adjournment under Standing Order No. 9.

Mr. S. Silverman: While it is no doubt the case that you, Sir, cannot question, and should not question, the good faith of the claim made by the Government so that the refusal to lay the document on that ground is now supported by your Ruling, the House itself is not so compelled. If there are hon. Members who wish to question the good faith of the claim made by the Government, there ought to be a method by which that good faith can be challenged. Is not the Motion which my right hon. Friend the Member for West Bromwich (Mr. Dugdale) sought leave to move an appropropriate way for the House to express the view—if it holds the view—that the Government's claim has not been made in good faith and ought not to have been made?

Mr. Speaker: I have already ruled on that application. I do not express agreement with the view expressed by the hon. Member for Nelson and Colne (Mr. S. Silverman).

Mr. Thorpe: On a point of order. I beg to give notice that I shall seek to raise this matter on the Adjournment. May I make this submission to you? [HON. MEMBERS: "No."] I take my rulings from you, Mr. Speaker, and not from the Government benches—

Mr. Speaker: Order, the hon. Member has given notice that he will seek to raise the matter on the Adjournment. He has given me notice to that effect.

COMPLAINT OF PRIVILEGE

Mr. G. M. Thomson: I wish to raise with you, Mr. Speaker, a matter which appears to me to raise a question of a breach of the privileges of this House. It occurs in a report in the Guardian of today, from its correspondent in Salisbury. With your permission, I shall read the relevant portions of the report. They are as follows:
The Northern Rhodesian African leader, Mr. Kenneth Kaunda, had his documents confiscated by Federal Government immigration and customs officials and was forced to remain in the airport building for five hours when he arrived in Salisbury today on his way from London, where he had talks with Mr. Macleod.
Mr. Kaunda has been a prohibited immigrant in Southern Rhodesia since 1954.…
Today, he spent 45 minutes in the immigration office where officials confiscated his suitcase and documents—including a letter from Mr. George Thomson, a Labour M.P., correspondence between him and the Governor of Northern Rhodesia, Sir Evelyn Hone, about the Northern Rhodesian constitution, his presidential address to the congress of his party in Broken Hill next Sunday.…
In support of my submission, I wish briefly to make three points, Sir. First, it appears that this matter comes wholly within the jurisdiction of this House of Commons. Mr. Kenneth Kaunda is a prohibited immigrant, not of the Federation of Central Africa which has certain attributes of sovereignty in regard to immigration. Mr. Kenneth Kaunda is a prohibited immigrant to Southern Rhodesia, which, in the legal sense at least, is still a Colony finally responsible to this House. Moreover, Mr. Kenneth Kaunda is himself beyond doubt a British-protected person for whom this House of Commons is responsible.
Secondly, the letter to which reference is made in this news report is, to the best of my knowledge, a letter arising out of proceedings in Parliament, since it is a letter which followed from Questions in the House and which, I believe, accompanies a letter from one of the Ministers of the Government which I was passing on to Mr. Kenneth Kaunda.
Finally, arising out of these two initial observations, I put this to you, Sir. It would seem impossible for hon. Members of this House to do their duty, as Members of Parliament, on behalf of British-protected persons if it is possible for our private correspondence on. Parliamentary matters with those persons to be arbitrarily seized by the officers of a colonial administration.
I therefore beg to submit to you that there is a prima facie case of breach of Privilege.

Mr. Speaker: I am obliged to the hon. Member. Under our present dispensations, I am allowed 24 hours to consider such matters. That I shall do in relation to this matter, subtracting from the 24 hours by ruling on it tomorrow morning.

Orders of the Day — FINANCE BILL

Order for Third Reading read.

4.27 p.m.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd): I beg to move, That the Bill be now read the Third time.
I almost said "at this late hour", Mr. Speaker. I think that the more controversial elements of the Bill have been exhaustively debated. I do not propose to go through all the arguments again this afternoon. I should like, however, to begin by acknowledging the courtesy with which I have been treated throughout the various stages of the Bill. My hon. and right hon. Friends behind me have not, on the whole, and in all circumstances, been too unkind to me and I am grateful to them.
The right hon. Member for Huyton (Mr H. Wilson), captain of the opposing team, has had long experience of these matches. He is a formidable opponent. I have not always been quite certain whether he was batting or bowling, but he certainly used his available resources with great skill.
I see the hon. Member for Sowerby (Mr. Houghton) present on the Opposition Front Bench. He has been a steady and painstaking bowler. If I may say so without offence, he has kept a very good length during the stages of the Bill and it has needed a very straight bat to play him.
The hon. and learned Member for Kettering (Mr. Mitchison), who is to follow me in the debate, is one we all admire for the skill and industry with which he has drafted Opposition Amendments. Throughout the match he has been very busy with his pencil. Perhaps it is the somewhat rare case of the scorer being allowed to play in the side, too. I must be careful about analogies because one does not know where they may lead. There have been many thoughtful and constructive speeches made on both sides of the House and Committee at all hours of the day and night. It would be invidious for me to select particular ones for mention, but what has been obvious to the whole House has been the extent to which I have relied on the good services of my


hon. Friends the Financial Secretary and the Economic Secretary.
I formulated the proposals in the Bill against a background which I tried to define in my Budget Speech. Perhaps I may be allowed to quote from that statement:
what should be the purposes of this year's Budget? The rise in personal consumption must be restrained. I would hope that as in 1960 increased saving would be an important part in this. Nevertheless, I am sure that the broad effect of the Budget must be counter-inflationary; there must be a larger surplus above-the-line than last year and a smaller overall deficit. All existing encouragements to investment must be maintained. Room must be left for increased exports. I must consider whether existing methods of regulating the economy can be improved upon. I must also consider whether any additional incentive, to effort and initiative can be provided. Above all, in everything I do I must have in mind the maintenance of confidence in the £ sterling, both at home and abroad"—[OFFICIAL REPORT, 17th April, 1961; Vol. 638, c. 801.]
Nothing has happened since to change that analysis. The continued growth in personal disposable incomes, in consumption, in Government expenditure, the movements of sterling, the trade returns the continued upward trends in investment and the strains and stresses in the international situation—South-East Asia, Africa and, more recently, the Middle East, and Berlin—have confirmed the analysis of what was needed from this year's Finance Bill. I wish, therefore, today to mention only some of the salient features in the Bill. First, its counter-inflationary aspects. I provided for a surplus of over £500 million above-the- line and for an overall deficit of only £69 million. That involved asking for certain sacrifices. To meet increased public expenditure, and to provide that surplus, I had to keep almost the whole of the increased proceeds this year from direct taxation, except for the minor relief—though quite a costly one—relating to the deduction of National Insurance contributions for tax purposes.

Dame Irene Ward: A silly one.

Mr. Lloyd: I have made no direct concessions in the field of direct taxation which affect revenue this year. This means that, with the buoyancy of the Revenue, something like £400 million more will be raised in this way, that is

by direct taxation, this year as compared with last year.
No doubt the House will have noticed in the recent Quarterly Revenue return that the yield of direct taxation went up by over £90 million in the first quarter of this financial year as compared with the first quarter of the last financial year and there is still nearly £300 million extra, compared with last year, to come in that way. I believe that that will play its part in countering inflation.
The suggestion has been made from time to time that indirect taxation has been increased and direct taxation has been reduced. I do not necessarily say that such a process is wrong. On the whole, I believe that spendings rather than earnings should be taxed. But in fact that has not been taking place. Of the total to be raised in taxation, direct taxation accounts for 60·1 per cent. compared with 58·5 per cent. last year; indirect taxation 39·9 per cent. as compared with 41·5 per cent. last year. I think that completely disposes of the argument that we on this side are somehow favouring those who pay direct taxation at the expense of those who pay indirect taxation.
To procure this surplus above-the-line I had also to impose some increases in taxation—heavy oil, motor vehicle licences and television advertisements. All three sets of proposals have been strongly criticised. This, I think, was to be expected. No new tax is free from disadvantages of one sort or another. I think, however, that those who criticise these increases in taxation must look at the Budget as a whole. They must weigh the disadvantages of particular taxes against the overall aim. I do not consider that either the heavy oil duty or the motor vehicle licence duty was unfair in the circumstances, and the diversity of the criticisms in fact show how wide was the spread of the burden.
I did feel able to make two concessions relating to oil. First, with regard to horticulture, I gave the reasons fully last Monday and will not repeat them. I also felt it reasonable that with regard to stocks of oil in users' possessions it would be inequitable to levy a tax on stocks bought and delivered to the final user before the Budget. I believe that both these concessions were just and reasonable.
With regard to the duty on television advertising—a new departure—I believe that there was some considerable support, though I admit some dissentients, for the proposition that some special contribution should be made from this particular field of activity. I am not going again today into the argument about passing on the tax. That was discussed fully during the Committee stage. I only repeat today that the conduct of programme companies in this connection will be closely watched. In my opinion, it is reasonable that they should assume a part of the burden. This has happened in some cases.
The next feature in the Bill, which I wish to mention, and which also has aroused much controversy, is the Surtax concession for earned income. The ground has been thoroughly covered and was gone over again only last Tuesday. I simply repeat that I believe that the level of direct taxation on those with higher earnings has been a substantial disincentive to effort and productivity. I am always having the international league tables thrown in my face, and I think it fair to point out that my Surtax concessions will simply make the position of those with higher earnings in this country more nearly comparable with that in the United States, Germany, France and Italy, who are our competitors.
I never thought that it would be particularly popular. It is very easy to make demagogic arguments against it. I thought that it was in the national interest to put forward that proposal, and I have done it, I think, in a reasonable manner because of the timing of the concession, which will not come into effect until January, 1963, and because I increased Profits Tax to bear the cost of it. I express the hope—and I have been most careful in doing this because it is only a hope—that it may be possible for me in the future to carry on this policy of reducing direct taxation to increase the incentives to effort through a wider band of incomes.
I am not going in detail through the various provisions of the Bill, though I would remind the House that there are some useful minor provisions in it. I know that the proposal for compensation for victims of Nazi persecution, and the manner in which I have done it, has caused general satisfaction. For once,

retrospection has not been controversial. I believe that the concession with regard to parsonage houses has also been well received. I think that the minor changes in double taxation will be useful.
Over the more controversial matter of business expenses, again I believe that my statement in my Budget speech and the proposals in this Bill have found general acceptance. I cannot refer, Mr. Deputy-Speaker, to what is not in the Bill, but I have promised to watch this matter and, depending on events, what is in this Bill may not necessarily be my last word.
With regard to the two regulators, there is not very much new to say about them. On the whole, I think that they have been rather better received than I expected. [An HON. MEMBER: "Not on this side of the House."]
I spent a considerable part of the six months or so before the Budget examining various suggestions for new economic regulators and criticisms of existing ones. In almost every case the arguments against far outweighed the arguments for, whether looking at monetary measures, sales taxes, turnover taxes, physical controls and all the rest of it. The disadvantages stood out with precision and were clearly defined. So it is with my two proposals embodied in this Bill. The disadvantages can be clearly presented, defined, pinpointed and elaborated. The advantages of using these methods of securing a healthy overall economy are confined to the general objectives to be attained. It is not so easy to present them if one says that they are designed to achieve a general objective when quite obviously practical disadvantages can be used against them just as against any other means of regulating the economy. Pharmaceutical science may have devised means of making nasty medicines more pleasant to take, but that is not yet an established art for a Chancellor of the Exchequer. The test in each case is whether the patient retains or recovers his health.

Mr. Gerald Nabarro: Or dies.

Mr. Lloyd: I think that comes in the phrase "retains his health".
I believe that the Amendments that I have accepted, which are now incorporated in the Bill, have met in a fair


manner the constitutional anxieties which, from the first, I have conceded where wholly reasonable. These two proposals were put forward as regulators to be used between Budgets, just as monetary measures can be used between Budgets.
I admit that they are somewhat blunt instruments in the sense that, in the case of the first regulator, there is a flat rate percentage increase in the duties, and in the case of the second one there is a limitation of the power to discriminate to the various categories of stamps. I am well aware of the disadvantages. With regard to the second regulator, I am conscious of the strong feeling there is that an increase of 4s. a week upon the employer per employee is a very serious matter. I am conscious of that fact and I hope that other people concerned with earnings will bear that consideration in mind.

Dame Irene Ward: My right hon. and learned Friend said that the burden would be borne by the employer. That may be so in industry, but in local authorities the burden would probably be borne by the ratepayers, and in the main by those living on small fixed incomes. This is a point which we have not been able to discuss in the Finance Bill.

Mr. Lloyd: In that case the ratepayers are the employers. The point which has been made again and again is that 4s. a week per employee would place a very great burden upon the employers should Regulator No. 2 be put into force. That is a matter to be taken into account, as well, perhaps, as in other connections which I shall not be in order in developing this afternoon.
Turning to another point which was debated at some length on Tuesday, I can understand the argument that I should not be given these powers at all, but I cannot understnd the contention that some time limit associated with the ending of the Finance Bill should be attached. It seems to me that if this conception of a flat-rate is accepted, the procedural method contained in the Bill is not inappropriate.
We were rather late in starting the debate, and I want to take up as little time as possible. I should, however, say this: I have not concealed from the

House at any time since I became Chancellor my anxieties about long-term trends in our economy. I was accused of being complacent when I ventured to say that we had a lot to be thankful for. We have a lot to be thankful for. But we have to realise that rising standards in this country have got rather ahead of rising production and rising productivity, and that is a bad thing for any economy. This Bill is an important contribution, I believe, towards the restoration of a better balance, and I commend it to the House.

4.42 p.m.

Mr. G. R. Mitchison: May I, on behalf of my right hon. and hon. Friends and myself, thank the Chancellor for the kind words which he has used about us. I hope that he will not consider it amiss if I suggest that the Government were undoubtedly the slips and the hon. Member for Kidderminster (Mr. Nabarro) at any rate one candidate for the position of third man on this cricket field. Be that as it may—and I willingly yield to the right hon. and learned Gentleman on a matter of that sort—I am afraid that I cannot accept the optimistic view which he has taken either of the Finance Bill or of the criticisms of it. If this were a Budget confined simply to providing taxes and reliefs in this present year, no doubt to continue afterwards, and if those taxes and reliefs were operative by virtue of the Budget and not of some subsequent Order, we might not have very much to quarrel about.
Let us consider for a moment what would be in an ordinary Finance Bill. There would be a number of measures, some in one direction and some in another, connected with something so obviously right as the increase in the Income Tax relief for National Insurance contributions—a matter which my hon. Friend the Member for Sowerby (Mr. Houghton) first raised some time ago. There would be such other matters as the Television Advertisement Duty, involving £8½ million, which is not negligible; the £2,000 limitation in respect of cars, which is a matter of £3 million and something which we all welcome, although rather late in the day; and the relief in respect of what I call Nazi persecution compensation. If that were all we should find little to quarrel with, and the total amount of those small items together is about £5 million, on balance.
If one turns even to the major items, we have no fundamental quarrel with such an increase as that made in connection with fuel oil. We wished to exclude kerosene from it, but I will not go into that now, just as we wished some exclusions from the duty on motor vehicles; but we should not have taken a deep objection to any of those provisions.
Our objections arise on three things, none of which occurs in an ordinary Finance Bill, and I wish to devote most of what I say to those three things. It is because of our opposition to them that we voted against Second Reading and propose to vote against Third Reading. The first two are the two regulators. In the nature of the case, we know not whether they will come into operation or when they will come into operation, except that if they are to work at all it will be some time during the coming year. The third thing is the fundamental change in the raising of Surtax, which, because it is Surtax, will come partially into operation next year, 1962–63, and fully into operation in the following year.
All of these provisions—the regulators and the Surtax concessions—involve very considerable sums. I think that the best way that I can put it is that the two regulators each give the Chancellor power to levy an additional £200 million of taxation. We were told that the fundamental point of the Budget and the Bill is that at the end of the day the Chancellor is left with a balance of £68 million on this year's provisions —not a continuation of the preceding provisions. In comparison with that, the two regulators at once assume very considerable importance by reason of their amount. The same comment applies when we come to the Surtax provisions. When they come fully into operation they will account for £64 million. They too, therefore, in relation to the balance left by the Budget and the whole financial picture, are of considerable importance. I regard the Finance Bill as consisting of the Surtax provision, the two regulators and a number of other provisions which are of much less importance for reasons which I shall develop.

Sir C. Osborne: Surely a deficit of £69 million will be affected by

the Supplementary Estimates. Goodness knows what the figure will be when they have been received!

Mr. Mitchison: In relation to a figure of that order, with or without Supplementary Estimates, figures of £200 million each for the regulators and £64 million for Surtax are of very great importance. That is the point I make.
The right hon. and learned Gentleman gave his reasons today for regarding this as what he called a counter-inflationary Finance Bill. It may well be a counter-inflationary Finance Bill. All I can say is that since the Budget Speech was made, and since the Bill was introduced, the reasons for dealing with the inflationary situation and the character of the situation itself have not diminished. In view of that, I must point out that the Budget has followed something which was of considerable economic importance—the steps which were taken, which I cannot discuss now —in connection with the National Health Service contributions and the health charges. It is in the light of that, as well as of the general position, that the Finance Bill has to be considered.
The largest item is the increase of 2½ per cent. in Profits Tax. This represents a substantial sum. In a full year it will bring in about £70 million. This has the same character as the measures to which I have just referred. It will not come into full operation at an early date. I shall say no more about it than that we have made our criticisms of the character of Profits Tax. We have pointed out the effect it has on distributed and undistributed profits. I do not propose to develop it further.
I come back to the three main points. Our first objection to both these regulators is the bluntness of the instrument which the right hon. and learned Gentleman is using. I do not believe that this bluntness is necessary, but to sharpen the instrument would involve a degree of planning and foresight which appears to be wholly alien to the philosophy of the Tory Party. For that reason, no doubt a blunt instrument has been preferred and we are asked to trust with a blunt instrument someone who professes himself to be unable to use a sharp one. The right hon. and learned Gentleman himself took the point in connection with the first and the less


offensive of the two regulators—the one concerned with indirect taxation—that he contemplates and provides for an overall increase in duties, the incidence of which in any particular case will be of very different importance. To that extent it is a blunt and undiscriminating instrument.
I want to say something about the first regulator. We on this side of the House have always appreciated that there is a case for doing some things at any rate between Finance Bills, particularly in connection with tax avoidance. I shall not develop the point now, but we have constantly urged that there should be power to take action in the matter of tax avoidance between one Budget and another. However, that is an entirely different thing; it is merely enforcing the law as the law was intended to be by those who passed it. This regulator would levy very considerable tax. I am no economist. If I were, I should no doubt be able to understand why, when the Government complain of prices being too high, they put on a tax to make them higher and think that they have cured the matter. That is what appears to be the position about the first regulator. I am sure that I shall be told how utterly wrong I am, but I notice that my doubts and difficulties are shared by a number of responsible people.

The Financial Secretary to the Treasury (Sir Edward Boyle): Is the hon. and learned Gentleman now saying that his party are against the first regulator, because they did not vote against it and at least one hon. Member opposite made a speech very strongly in support of it? It should be clearly stated whether hon. Members opposite have had second thoughts about this or whether they still hold to the view they expressed when Clause 9 was debated.

Mr. Mitchison: So far as I know, we never expressed a view on whether this regulator ought or ought not to be put into force. That is what the Financial Secretary is asking about. I have already said that we do not take the same objection to the first regulator as we do to the second regulator. Indeed, the hon. Gentleman would be fully entitled to remind me, if he chose to do so, that in 1948, some of the provisions contained in the first regulator were put into the

Finance Bill by the Labour Government and could have been applied to Purchase Tax. I am not going so far as to say that, if it is intended to meet a disinflationary situation, the right way to do it is to push up prices by this regulator. I cannot be expected to accept that, at any rate for myself.
The second regulator appears to have every possible fault, all of them of the character of bluntness. It was introduced in such a form and the Money Resolutions were so worded that we have been unable fully to develop what we should have liked to say about it. We have been able to put the point generally. I shall do so again. This regullator will impose an increase, the severity of which each of us can judge for himself, on various labour costs, including the costs of exports. It will, therefore, pro tanto weaken our position in a competitive world at a very competitive time. It will operate, if it operates at all, equally in places where at the moment there is a shortage of labour and where at the moment there is almost an excess of labour or, in fact, an excess of labour. It will operate in Scotland and in other parts of the North, just as it will operate in the Home Counties and the more prosperous parts of the Midlands.
Every hon. Member must agree that that in itself is certainly a very serious fault in such a proposal as this. It is a very serious fault which will result in considerable hardship in the areas where there is a shortage of employment at the moment. The position of Scottish industrialists will be made just that much more difficult in relation to industrialists carrying on similar businesses in other parts of the country. There is no reason why it should be allowed to operate in this way, except the use of the National Insurance machinery. If the only way in which it can be operated is by using the National Insurance machinery, there is no doubt some administrative difficulty about discriminating between one part of the country and another. My answer to that is that machinery is an important matter, but if it can be done only in that way it would be very much better not to do it at all.
I entertain doubts about whether for that reason alone this regulator will be applied, but the right hon. and learned


Gentleman has told us that he has not made up his mind and our fishing expeditions earlier in the week led to no result. I do not expect any result today. So much for the distinction between one part of the country and another.
There are other distinctions. This charge on labour costs will have a widely different effect on different industries, roughly corresponding to the proportion which labour costs bear to capital expenditure and other costs in the conduct of the industry. A trade like papermaking has very light labour costs, but we can all think of trades which have considerable labour costs. There is also the absurd case which was put to the Chancellor of the Exchequer a short while ago. To put this tax on local authorities because the Government cannot think of any other way of doing it is complete nonsense. No good result which I can see can possibly result from putting on to the rates an additional charge in respect of every council employee. There are 750,000 local government employees. There are half a million national Government employees, and the tax is to be put on them too. What is the use of putting 4s. a week on the Chancellor's salary? It is comic and absurd.
Another very large class of people will be covered by this regulator. I refer to the people who are described as professional, scientific and similar employees. This is a very large group of people amounting to between one-fifth and one-quarter of the total employed people in the country. They are office staffs, people doing research work, and so on. It is a much larger group than people commonly realise. What good can possibly result from putting this tax on in their case?
I suggest that partly because of this complete inadaptability to geographical distinction, and partly because of its equal inadaptability to differences between different industries, this regulator, if it is imposed, will be a thoroughly bad tax. It constitutes, of course, a charge on the costs of industry—more serious in some than in other cases—and it will be ineffective for the purposes for which it is designed. It will cause a great deal of unfairness, not only between one part of the country and another, but between one industrialist, one employee and another.
After all, are not the Chancellor's reasons for it based on the assumption that if one prunes labour in one industry or area one can use that labour in another? That assumption is absolutely incorrect. One cannot move people about from one place to another, nor, in the majority of cases, can one readily transfer them from one industry to another. Therefore, as an incentive to economy in labour costs I regard this as useless. But I regard it also as being capable of causing a great deal of hardship.
I must say a word about the constitutional position. I am well aware that the Chancellor well knows that he is doing something which has never been done before. It is not the same as the minor adjustments of Purchase Tax which were contemplated in 1948 or 1949. It seems to me that one has always got to compromise between the representative control of taxation on the one hand and the requirement of sheer efficiency in taxation on the other.
The trouble about these two regulators is that they could well have been, as far as I can tell, put into the Bill as legislative action if they were really intended for serious use in the early future. If they were intended as a precaution, then that argument fails and I would not wish to press it. But if what we are doing today, and the short passage of this Bill in another place, is to be followed by the early use of these regulators, then they should have been put into legislation and not left to an administrative Order brought forward very shortly after the passage of the Bill itself.
The Surtax question has led to a great deal of curious argument on the Government side. It is said that this does not really affect the present position because, in the nature of the case, when one is dealing with Surtax, the yield of the benefit of the Surtax concession will not be passed on to Surtax payers fully for a couple of years or even partially for one year. Surely that is a very "phoney" argument indeed? The Surtax payer now has to provide for the tax which he will have to pay in a year or two according to whether he pays under Schedule D or Schedule E. I dare say that he does not always do that, but he should. When considering the effect on the economy, that should be considered. He knows that he will get the concession and he spends accordingly. That is the point.
Further, that psychological aspect must be considered. The most abstract economist recognises that questions of inflation and disinflation are largely psychological matters—questions of confidence, of willingness to spend or to save as the case may be. I see that the hon. Gentleman the Member for Louth (Sir C. Osborne) seems not to be agreeing with me, but I beg leave to use my ordinary knowledge of human beings to assure him that that is so. Perhaps I did not make myself clear. If a man knows that he is going to get whatever the sum is in a Surtax concession next year or the year after, he tends not to save that amount now but to spend it. Therefore, when considering the question of whether this is a disinflationary Budget, one must reckon the Surtax provisions and also the psychological effects of them.

Dame Irene Ward: Hear, hear.

Mr. Mitchison: It is monstrous, at a time when we are talking about the difficulties of promoting exports, about the question of competitive costs, when we are saying that productivity is so important and is not advancing by comparison with our competitors, and when putting a tax on industry in the shape of increased Profits Tax and oil tax, the Government should have given these Surtax concessions.
If these concessions had been given along with other concessions, we might not have the same violent objection to them, but when they are given now, against the background of the Budget, which is said to be disinflationary, just after the National Health Service contributions and charges have been increased, then we say, whatever their financial advantages are supposed to be, that they are a gross act of social injustice and political folly. That is the way we regard Surtax concessions at the moment, and let there be no bones about it.
What is a man who is earning a smallish income going to say when he sees that there are little or no concessions so far as he is concerned and when he sees the increase in expenditure which the Government is putting on him, when he knows that, at the same time, 350,000 or so people in the country have received

a concession which amounts to about half of the total yield of Surtax and when he sees that this concession is so arranged that nearly one-third of the total income of £19 million out of £64 million in a full year goes not to earned income but to unearned income? What is the justification for that in what is said to be a disinflationary Budget?
Let me remind hon. Members that this is happening at a time when men up and down the country are being asked to be moderate in their wage demands and when hon. Gentlemen opposite are complaining about industrial action of one kind or another. Is this going to help? Surely no single measure could possibly do more social harm than this concession at this moment in the circumstances which the right hon. and learned Gentleman has described to us.
If it were a question of equalising the treatment of the well-to-do in this country as between the well-to-do of another country there might be said to be some abstract justice about it. But surely not now, in a disinflationary Budget—not in a Finance Bill which makes such few concessions to ordinary men on lower incomes, not in a Finance Bill introduced directly after the charges that were imposed. It is on these grounds that my hon. Friends and I consider this to be absolutely indefensible.
To put the matter shortly: because of the character of the second regulator, if it is going to be used, and because of the Surtax concessions, we shall divide the House—a somewhat unusual step on Third Reading.

Mr. Stanley McMaster: Is the hon. and learned Gentleman allowing for the fact that a considerable part of this concession might well be saved and invested in British industry, which would add to our competitive ability in the export market?

Mr. Mitchison: That can be said of all tax concessions and it raises entirely different questions. This is not even supposed to be a tax in relation to investment at all.
It is supposed to be a relief for earned income and an incentive to executives. The Chancellor of the Exchequer said that it was an incentive. We have never had any evidence to that effect, except the ipse dixit of some hon. Members


opposite. The Royal Commission, which went into this matter, found the direct opposite some years ago, and I have no reason to suppose that they were wrong.

5.11 p.m.

Sir Cyril Osborne: I should like to take up three points made by the hon. and learned Member for Kettering (Mr. Mitchison). First, he said that the Budget was supposed to deal with an inflationary situation. I agree with him when he says that the inflationary position has worsened considerably since the Budget proposals were made three months ago. One of the questions which I wish to ask the Chancellor of the Exchequer is whether he feels that the proposals which he made three months ago are adequate to deal with the vastly worsened position of today.
The second point made by the hon. and learned Gentleman which I wish to take up is this. He said that the overall deficit of £68 million was out of all proportion to the concessions being made. The Chancellor of the Exchequer has to say "No" to the spending Departments during a whole year if he is to preserve only that £68 million overall deficit. I hope that he will be able to keep to it, but I have grave doubts about that.
Thirdly, the hon. and learned Gentleman said that the Surtax concession could not be justified socially. I think that there is a good deal to be said for his point. It is the executives who will benefit mostly from the Surtax concession and who will decide largely whether extra effort is made to put our goods into the export market or into the easy home market. At the end of twelve months, my right hon. and learned Friend will be justly entitled to go to them and say, "Unless you have improved your efforts in the export market, I will take the concession away".

Mr. Herbert Butler: That is Little Bo-Peep.

Sir C. Osborne: You probably understand Bo-Peep. It is a game that you play, and you are qualified to play it.

Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): I hope the hon. Gentleman will remember that he is addressing the Chair.

Sir C. Osborne: I beg your pardon, Mr. Deputy-Speaker. I withdraw that remark.
I wish to make only two points. First, I doubt whether any of the proposals made, especially the regulators, can touch the economic position in which we now find ourselves. In my view, I believe that the economic position has vastly worsened nationally since the Budget proposals were made three months ago. Does my right hon. and learned Friend still think that the steps which he is taking are sufficient to deal with the position which now exists? As I see it, the trade gap has widened dangerously since the proposals were first made.

Mr. Selwyn Lloyd: That is not so. It has not improved as much as I expected, but it has not widened.

Sir C. Osborne: Then I withdraw that. It has not improved to the extent that we assumed that it would improve. Therefore, I believe that these regulators will have to deal with a more serious situation than the Chancellor of the Exchequer expected when he made his proposals.
Over the last ten years I have been arguing that both sides of the House have minimised the difficulties which we face. I think that if I exaggerate the difficulties now I will do a service for people outside the House. That is what I wish to try to do. Our gold and dollar reserves have fallen. I think that my right hon. and learned Friend will agree with that. The terms of trade are tending to move against us, whereas before we benefited considerably from a fall in the prices of raw materials. Invisible earnings are getting worse, and our military expenditure abroad is increasing. Lastly, I am sorry to say, but it is obviously true, there is an unfortunate loss of confidence in sterling in the financial centres of the world. These are facts which we must face. The position of sterling is maintained only by the help that we are getting from certain central banks.
My right hon. and learned Friend will probably chastise me for saying this, but I feel that I ought to say it. In some respects, we face a graver economic crisis than at any time since 1931. In those days, the crisis was an international one.


Today, unhappily except for this country, the position of most countries in Europe is improving.

Mr. A. E. Cooper: Mr. A. E. Cooper (Ilford, South) rose—

Sir C. Osborne: Let me make my speech. What I say to my right hon. and learned Friend and to my hon. Friends below the Gangway is this. In my opinion, the nation is more flabby mentally, morally and physically to face the problems which we face than it was 30 years ago. It is because of this that I wish to ask my right hon. and learned Friend whether he still thinks that what he is trying to do will deal with the problems which face us.

Mr. Cooper: Is it not a fact that my hon. Friend has a reputation in the country for being a later-day Wakes Week?

Sir C. Osborne: I have been accused of being a Jeremiah. I do not mind that. I have been reading the speeches which I have made on Finance Bills during the last ten years. I will pass them to my hon. Friend. I stand by them today.
Only last week a Question was asked of my right hon. and learned Friend about national productivity. He said—and this is the background against which we must judge the Budget proposals—the national productivity in the first quarter of this year was up 1 per cent. but that industrial employment was up 2 per cent. Therefore, the net productivity per person was down 1 per cent. Is there anything cheerful about that? It gives me the willies to think about it. It is against that background of the lack of increased productivity that there are increased demands from millions of men for higher wages. How can we stop inflation in conditions like that?

Mr. H. Rhodes: Is the hon. Gentleman aware that between 31st March, 1960, and 31st March this year 362,000 people went into various forms of civil employment and that production dropped? The hon. Gentleman fought his election campaign not on this sort of talk but on the basis that we have never had it so good.

Sir C. Osborne: I am sure that I will not be allowed to follow up that intervention, but I would not exchange my election address for the hon. Gentleman's. I would go to my constituents on my election address rather than on the hon. Gentleman's election address. As a say, it is against this background that I ask my right hon. and learned Friend whether his Budget proposals are adequate.
In the Economic Survey which he presented to the House at the time of the Budget, he gave these facts. He said that in the previous year we had paid ourselves in salaries and wages 7½ per cent. more than in the previous year and that the normal working week had dropped by 2½ per cent. Yet production remained at the same level. In these conditions, how can there be anything else but inflation? I want to plead later for the people who have got Government stocks and who have been swindled out of their savings by holding those stocks.

Sir E. Boyle: That is not related to the Finance Bill. Is my hon. Friend saying that the Budget ought to tougher or not so tough? If he says that taxes ought to have gone up more, how does that help production, and if he says that they should have gone up less, how does that help sterling? I cannot see the conclusion to which he is leading.

Sir C. Osborne: I do not think that the Budget is half tough enough, and I do not think that the Government have told the country how serious the position is. It is high time that Ministers stopped going round the country telling people that they have never had it so good, because they already know it. They are not grateful for it and they think they have a divine right to have it that way.

Mr. Deputy-Speaker: Perhaps, it would help the House if I were to read from Erskine May on the Third Reading of the Finance Bill. It says:
On third reading of a Finance Bill, debate and amendment must be strictly relevant to the contents of the bill, and the expenditure of the year and alternative methods of providing revenue may not be discussed.

Sir C. Osborne: Clauses 9 and 30 of the Finance Bill—to which I was hoping to direct my remarks—impose certain


regulators which, I am suggesting to my right hon. and learned Friend, are not severe enough to deal with the position that has developed since he first introduced his Budget proposals. It is to Clauses 9 and 30 that I wish to direct my remarks, and I hope, Mr. Deputy-Speaker, that to that extent you will allow me to continue.
The tragedy from the national point of view is that it is only the marginal bit that is putting us out of court. We are overspending to about Is. in the £, or even as little as 6d. in the £, but the nation does not realise it. Though it is only so small an amount, cumulatively it can run us into a debtors' prison. All I am asking is whether the regulators proposed under Clauses 9 and 30 will be severe enough. I hope that you will not rule me out of order, Mr. Deputy-Speaker, because this was said in a previous Budget debate by a very distinguished Chancellor of the Exchequer. I do not say this in any offensive manner to my right hon. and learned Friend, but I wonder if he might take a cue from one of his famous predecessors. [HON. MEMBERS: "Sir Stafford Cripps."] Of course it was Sir Stafford Cripps. In the report to O.E.E.C., Cmnd. 7572, it was said:
The difficulties of the present economic position do not present themselves in an obvious form to the British public."—
I am asking my right hon. and learned Friend to do something more to make that possible now—
A real and grave crisis in economic affairs seems remote and unreal.
Will the regulators in Clauses 9 and 30 do anything to make men and women in all walks of life, the rich as well as the poor, realise that we are living beyond our means and that we must make a greater effort for the good of the country? The then Chancellor said:
No Governmental action of any kind can in fact save our present social and living standards.
Sir Stafford Cripps said that. He finished by saying—and this is what ought to be said today:
We can express our present position,"—
he might be speaking here today—
robbed of all its technical surroundings and explanations, in quite simple terms."—

this is what he said ten years ago—
Unless we can all quickly produce more and get our costs cut down,"—
that is the essence of the whole thing—
we shall suffer a tragic fall in our standard of living accompanied by all the demoralising insecurity of widespread unemployment."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, c. 1352–3.]
No one believes that possible today. [HON. MEMBERS: "Why?"] Because they have been lulled into a sense of false security. I want someone in authority to warn the nation of the perils that lie ahead. I know that my hon. Friends below the Gangway may think that I am exaggerating.

Mr. Nabarro: The facts are miserable.

Sir C. Osborne: If the facts are miserable, then I must state them. For far too long we have lived in a fool's paradise.
I wish to cite two more sets of figures. The Chancellor told us in the Economic Survey—and the regulators in Clauses 9 and 30 are intended to deal with these points—that between 1959 and 1960 wages and salaries rose by 7½ per cent. and that ordinary share dividends rose by 24½ per cent. It is no good telling the workers that they must have a wage freeze so that we can export our goods at lower prices unless something is also done about the ordinary shareholders.
Furthermore, in answer to a Question a little while ago, the Chancellor gave the following figures. In the first quarter of this year—which makes it even worse —wages and salaries have risen another 9 per cent., production has remained stationary and ordinary dividends have gone up another 12 per cent. I do not think that the regulators in Clauses 9 and 30 will do the trick. I should like to see a complete freeze for two years of both wages and dividends.

Mr. Deputy-Speaker: I hope that the hon. Member will not go outside what is in the Bill in this Third Reading debate.

Sir C. Osborne: I will leave it at that, Mr. Deputy-Speaker, and pass to my second point. I know that I am not pleasing my hon. Friends below the Gangway.
Under Clauses 12 and 13, Income Tax is at 7s. 9d. in the £ and Surtax at 10s. in the £. I think that both rates are


much too high and are inflationary. If we could only get away from the narrow partisan arguments it would help, because hon. Members on both sides agree that these rates are far too high. No one should have more than three-quarters of what he earns taken from him.

Mr. Nabarro: I have been following my hon. Friend's speech very closely. I think that it is exceedingly miserable. He said earlier, in response to an intervention by my hon. Friend the Financial Secretary, that he wanted a much sterner and tougher Budget. How does he reconcile that earlier statement with what he is now appealing for, that Income Tax and Surtax ought to be further reduced? My hon. Friend cannot have it both ways. He is talking nonsense.

Sir C. Osborne: I am much obliged to my hon. Friend for his intervention. I said that I was in favour of reducing taxation for a certain period. I would say to those concerned, "I want economic results. If I do not get those results I shall put the taxes back again."
My right hon. and learned Friend will be aware that under his Budget proposals the Inland Revenue is expected to produce £3,610 million and that Customs and Excise is expected to produce £2,455 million. I think that savings are taxed too heavily and spending too lightly. I should like my right hon. and learned Friend to reverse the position and to tax savings less and spending more. That would encourage thrift. Because I think that the Budget and those two Clauses in particular are inflationary, I make a plea to my right hon. Friend on behalf of those who hold Government stocks and fixed interest bearing securities who have really paid for the Welfare State we have been enjoying.

Mr. Nabarro: On a point of order, Mr. Deputy-Speaker. Is it in order to talk about 3½ per cent. saving bonds on the Third Reading of the Finance Bill?

Mr. Deputy-Speaker: I was on the point of rising to invite the hon. Gentleman once again to restrict his remarks to what is in the Bill.

Sir C. Osborne: I am sorry, Mr. Deputy-Speaker. It is very difficult, as

you will understand, to put a case which one's hon. Friends dislike so intensely. But I will not be shouted down by my hon. Friend the Member for Kidderminster (Mr. Nabarro). He is not the Gauleiter of this House yet.
I argue that under Clauses 12 and 13 too much taxation is raised and that that taxation, raised in that manner, is in itself inflationary. I am entitled to argue that on Third Reading. I am pleading for those who are penalised as a result of the effect of Clauses 12 and 13. I hope that that is in order. There are £42,000 million—I ask the House to note these figures—of Government and other fixed interest bearing stocks held by the ordinary people of this country. Over the last twenty years, the value of the £ has dropped to one-third. Thus, the holders of those Government and similar stocks have lost no less than £28,000 million in real purchasing power. I plead with my right hon. and learned Friend, on their behalf, that sterner measures for deflation should be taken so that they do not lose more of their money.

Mr. Selwyn Lloyd: I thought my hon. Friend was arguing earlier that we wanted a reduction in taxation. Now, he is speaking of more taxation.

Sir C. Osborne: No, I am not. The Chancellor not only has the power to raise money, but he has also the right to say how much of it shall be spent and where it shall be spent. I want him to play the Molotov and say "No" to those who want to spend too much. I am surely entitled to ask him to do that. [Interruption.] I am sorry about this. I will pursue it no further now. On another occasion I shall seek to put my case when what I say is accepted as being more in order. [HON. MEMBERS: "GO on."] No; I have been ruled out of order by my hon. Friends below the Gangway.
I am a little doubtful about whether my right hon. and learned Friend will raise all the money he expects to raise. I can promise him that company profits this next year will not be nearly so high as, I think, he expects them to be, and his revenue may not be so high. However, on behalf of the holders of Government and similar stocks, I beg him to stick to the money when he has it and see that it is not spent wastefully.

Mr. John Diamond: Is the hon. Member aware that the Trustee Investments Bill is to be debated tomorrow and there is an Amendment to this very effect? No doubt, if he has not been in order in his remarks this afternoon, he will be in order on that occasion in particularising and discussing the matter in detail.

5.34 p.m.

Mr. Dan Jones: I am not sure that my opening remarks will be completely in order, but I feel bound to say that when an hon. Member is making such an earnest contribution as the hon. Member for Louth (Sir C. Osborne) has just made, I consider it a shame that other hon. Members should be so raucous in their interruptions. My own remarks will be directed, with equal earnestness, I hope, to the second of the regulators, the payroll tax.
I am very sceptical indeed about the payroll tax. In order to make my point clear, I will draw upon my experience in the engineering industry, in the tool-room. It is not at all uncommon for highly skilled workpeople to be underemployed for certain periods. I want the Chancellor and his advisers to be very careful indeed in the application of what can be a very dangerous method. In the toolroom, after people have tooled up a job and the job has been put out into production, it is by no means unusual for a lull to be experienced. I have known of it myself, and employers have told me how pleased they were that certain of their skilled men were kept on in such circumstances. Otherwise, when further orders came in which required tooling, they would have been in tremendous difficulties. Indeed, it is doubtful that they would have been able to overcome them. This is a point which should be clearly understood. I regard the payroll tax as indiscriminate and likely to be very dangerous for industry.
I come now to the second impact of the payroll tax, its impact upon the local authorities. The hon. Lady the Member for Tynemouth (Dame Irene Ward) tried to draw attention to this matter in an intervention during the Chancellor's speech. The point she raised was a very important one. To emphasise it, I shall read from a message sent to me by the

Town Clerk of Burnley. In his letter he says:
I would like to draw you attention to the serious effect which such a tax would have on local authorities.
According to statistics given in the Ministry of Labour Gazette for December, 1960, a census of local authority full-time employees on 25th June, 1960 showed a total in England and Wales of 1,178,755. If a tax of 4s. per week on each of these employees were to be charged, local authorities in the aggregate would have to find about £12¼ million a year, and this would affect Burnley to the extent of £36,000 a year.
An analysis of these employees shows that approximately half of them are teaching and other education staffs, police, fire officers, or are engaged in the health and welfare services. In addition, many of the employees in the central departments of local authorities are occupied in connection with these services. The employment of teachers, police and fire officers is subject to establishments which are still hard to achieve, and, if the purpose of the tax is to retrict manpower, it is difficult to see how this can serve a restraining purpose in relation to the local government services referred to.
I think that the object of local authorities generally is to use staff economically and that they need no fiscal disincentive of this kind to induce them to keep their staffs at the minimum level consistent with efficiency.
All I need add is that I am speaking of a constituency second to none in its contribution to our country's industrial and economic welfare. There are constituencies in the South which have by no means inherited such a hard and harsh legacy as has Burnley, and they are not, as Burnley is, in the process of trying to bring an old town up to something like the modern standards which its citizens richly deserve. I feel I am entitled Ito protest strongly against the application of the payroll tax to a constituency such as mine. The payroll tax is a blunt and unimaginative tax, and, for all the reasons I have given, there should be very great hesitation before it is ever applied.

5.40 p.m.

Mr. A. E. Cooper: First, I want to say, and I hope that he will not take it amiss, how much I deplored the speech of my hon. Friend the Member for Louth (Sir C. Osborne). The picture which he persists in painting—so black that it creates an impression all over the world and also in every section of our own country that this country is literally down and out and that we are a decadent and flabby race—is so far removed from the truth that


he does us a very great disservice. These may be the sorts of conditions which exist in Louth, but they certainly do not exist in my constituency of Ilford.

Mr. Nabarro: Nor in Kidderminster.

Mr. Cooper: I only want to add that in Ilford we have one or two substantial industries which are major contributors to our export trade, leaders in their own field who owe no apology to any part of the world for the contribution which they make to the betterment of mankind. We have to face the fact that ever since the war, we as a nation, at all levels of society, have advanced on a very broad front, and I say without hesitation that today the nation as a whole is better housed, better clothed, better fed and better shod than at any time in its history. If that is decadence, I think that we ought to have more of it.
To get back to the Third Reading of the Finance Bill, this Measure embodies my right hon. and learned Friend's proposals outlined in the Budget, and I suppose that in general the Budget can be considered to have had a very good response throughout the country. For the first time for a long time, it was a Budget designed in two parts; first, that which concerns the immediate financial year, and the second part, which contains the regulators, which may or may not be used, plus the concessions on Surtax, which will not operate until about 1963.
I want to address such remarks as I have to make purely and simply to the second regulator, which is the payroll tax, and to express the view that it will never be thought necessary to impose it in this country. I am not propounding any new economic theories, but simply asking my right hon. and learned Friend the Chancellor, the Financial Secretary to the Treasury and the Economic Secretary, hon. Members of this House and the country at large to recognise the economic facts as they have existed since the end of the war, and to try to learn some lessons from them.
If we go back to Lord Dalton's cheap money policy, I think that history will record that that fact of cheap money was probably the most inflationary instru-

ment used in this country since the end of the war, and that it was primarily responsible for the conditions which exist in our nation today. [HON. MEMBERS: "No."] I am not criticising Lord Dalton from sixteen years behind the times—we can all have hindsight—but simply saying that, in my view, the cheap money policy of the Labour Government immediately after the war was the greatest contributory factor to the inflationary situation which existed at that time.
Then, we come to the right hon. Gentleman the Leader of the Opposition and his Budget prior to the 1951 General Election.

Mr. Charles Loughlin: On a point of order. Is this a speech which can be strictly defined as a Third Reading speech?

Mr. Deputy-Speaker: The hon. Member is entitled to make that interruption. There is a tendency in this debate to go far too wide.

Mr. Cooper: I have no desire to get out of order. What I am simply trying to say by, I hope, a process of putting one brick on top of another, is how the fact of high taxation—[Interruption.] The hon. Member for Gloucestershire, West (Mr. Loughlin) has made his intervention. Perhaps he will have the courtesy to listen to what I have to say. I was simply trying to build up a case, by putting one brick on top of another, that high taxation is inflationary, and that in these circumstances, the payroll tax should not be introduced. I cannot see that there is anything very much out of order in that. [Interruption.] The hon. Member for Nelson and Colne (Mr. S. Silverman) is very voluble on very many subjects, but it is a great pity that his knowledge is so little where economics are concerned.
The right hon. Gentleman the Leader of the Opposition introduced his Budget to the House at the time of Korea. It was quite obvious at that time that he had to increase taxation in order to meet the expenses, but in proposing that Budget, he said, and this is the important point, that by increasing these taxes and by bringing into effect these higher taxes, it was an honest Budget which would cure inflation.

Mr. Arthur Lewis: On a point of order. You will recollect,


Mr. Deputy-Speaker, that the hon. Member for Kidderminster (Mr. Nabarro) drew your attention to the fact that the hon. Member for Louth (Sir C. Osborne) mentioned quite a lot that was not in the Bill. Is there anything in the Bill about Korea and the Leader of the Opposition introducing his Budget at that time?

Mr. Deputy-Speaker: As I said before, there is a tendency for the debate to go too wide, but I understand that the hon. Member was building up his argument in order to deal with something which is in order on the Third Reading of this Bill. I hope that he will do so.

Mr. Cooper: I am obliged to you, Mr. Deputy-Speaker. The net result of this increased taxation as a result of that Budget was to increase the cost of living and to be inflationary to an extent greater than we had ever known in this country.
Then, we come to what I regard as the most disastrous post-war Budget, which was the one commonly known as the "pots and pans" Budget, in which, again, taxes were increased in order to correct an inflationary situation, and, unquestionably, had the effect of increasing inflation. It was not until 1957 when we adopted quite different measures that we were able to correct inflation and to expand without inflation.
The payroll tax, which I suppose is one of the most criticised proposals in this Bill, will not, in my view, serve to do anything that it is intended to do. First, we have to consider that, and we have never heard from the Treasury Bench what exactly is intended by the payroll tax. Is it, for example, intended to cause economy in the use of labour? If that is so, I submit that 4s. a week per person, which is about Id. an hour in the main industries of this country, will certainly not have that effect, but it will cause very serious damage to the little woman at the corner of the street, with a little bakery or greengrocery shop, employing the minimum of labour, maybe only one person, and in that case it is something which will be passed on to the consumer.
The big firms with 5,000 or 10,000 employees will simply pick this up as an additional cost which will go through

with their other costs that may come along and will be passed on as a rise in price, which must inevitably be inflationary. The local authorities, the National Coal Board, and all the nationalised industries, which, in the main operate—I will not say on excessive labour—on the minimum amount of labour, will have to pick up this extra cost and pass it on in increased fares or charges in one way or another, so that if it is intended to cause economy in the use of labour, I submit to the House that 4s. per week per employee is a derisory figure which certainly will not have that effect.
If its purpose is to force industry into automation, the figure of 4s. per person per week is equally derisory. If we want industry to develop automation to a greater extent than it has done, it must be put in a position whereby the charge against it for not doing so is penal or almost penal. Alternatively, there must be Income Tax concessions by way of quick depreciation which would enable industry to automate. I submit to my hon. Friend the Financial Secretary that if the intention is to create an automated industry, the minimum figure should be, not 4s., but about £1 per week per person, and it should be accompanied by a provision in the Bill whereby anybody introducing complete automation would be able to write it off in the first year. That would have been a constructive proposal which would have helped production.
Secondly, however, if we were to increase the figure to £1 per week, we would not be able to adopt it in the blunt way that it is being introduced. There would be need to differentiate between all sorts of industries.

Mr. Sydney Silverman: On a point of order. I understood, followed and appreciated your Ruling, Mr. Deputy-Speaker, when my hon. Friend raised a point of order just now about things that were not strictly in the Bill, on the ground that the hon. Member for Ilford, South (Mr. Cooper) was building up an argument. It is now clear that he is building up an argument to support a complaint that something which he thinks should be in the Bill is not in the Bill. Is that in order?

Mr. Deputy-Speaker: I was listening carefully to what the hon. Member for Ilford, South (Mr. Cooper) was saying


and I thought he was addressing his remarks to a tax which is being introduced in the Bill. It may be that he was tending to stray rather further, but up to now I have thought that what has been said was in order.

Mr. Cooper: I am obliged, Mr. Deputy-Speaker.
The effect of increased taxation since the war and the introduction of this payroll tax, which, according to my right hon. and learned Friend the Chancellor of the Exchequer, will be an increase in taxation to the extent of £200 million a year, will be highly inflationary except on one condition: that is, if the Government are able to control wages, profits, dividends, prices and all external conditions. That would mean a totalitarian society which we in this country would not accept. The Budget will have the general approval of the country as a whole, but it is sincerely to be hoped that my right hon. and learned Friend will have second thoughts concerning the introduction of the payroll tax.

5.54 p.m.

Mr. Charles Loughlin: I do not want to detain the House for any length of time, but I should like to make two comments, one about Surtax and the other in respect of the two regulators. Before doing so, however, I should like to bring the House back to the picture painted by the hon. Member for Louth (Sir C. Osborne), because it is only in the context of that picture and of the facts of the economic situation that one can consider the Bill.
It is no good hon. Members, from either side, complaining when a picture has been painted in the blackest terms. What we have to concern ourselves with is whether this Finance Bill will meet the needs of the economic situation which all of us, whether we prefer the light-coloured or the dark picture, know is developing and is likely to develop quickly in the next few months.
The test of the Bill is whether, in the use of the proposals that it contains, the Chancellor of the Exchequer will be able to meet the economic situation during the next twelve months, and, in particular, the next four months, and whether as a result of so doing he will be able to maintain the existing

standards of the people. I am not concerned whether hon. Members opposite call me a Jeremiah or whatever description they apply to me. I do not think that the Bill will meet that situation. Indeed, the combination of the proposals contained in the Bill is more likely to increase the difficulties with which the country is faced.
It is no good saying that, in extremely difficult economic circumstances, we should ask the workpeople to restrain their demands for wage increases and, at the same time, saying that we can afford to give to 350,000 Surtax payers £83 million in relief. It is not a bit of good anybody saying that the Surtax payers will not get those reliefs for another year or two. I never knew of a Surtax payer who could not in any circumstances secure the maximum degree of credit or personal loan. The money will be spent if need be.
Think of the psychological effect. With all the criticism of the trade unions —I admit that they can be criticised—can any responsible trade union official go to his membership and say that, because the country's economic circumstances happen to be difficult, irrespective of the causes, whether or not it is the fault of Government policy, they must not ask for increases when, at the same time, the Chancellor of the Exchequer is prepared to extend benefits of this kind to people who can afford not to have those benefits if the economic circumstances are such an additional factor?
In the first regulator, the Chancellor takes unto himself power to increase certain taxes, whether they be Excise taxes or Purchase Tax. We know that within the next few weeks, as soon as the Bill comes back from another place, because of the economic circumstances it is reasonable to expect the Chancellor to impose taxes of one kind or another.
The Chancellor cannot commit himself. He cannot say that he will impose a 5 per cent. or 10 per cent. increase in Purchase Tax immediately the Bill comes back from another place, but it is reasonable to assume that he will impose an increase. That will mean that the men and women in industry must face an increase in their cost of living. In that event, obviously there will be demands for wage increases.
There are circumstances in which trade union officials, in defence of the work-people's interests, can say to the employees, "Whilst you have a justifiable case for wage increases, you ought to be prepared, not only in the interests of the country but in your own interests, to show a degree of restraint." But if, in the self-same Budget, the Chancellor is prepared to give £83 million to the Surtax payers while imposing taxes that will result in a 3 per cent, or 4 per cent. increase in the cost of living by the end of this year, how can any responsible trade union official talk about wage restraint?
There is not so much danger to the economy if we have responsible people on both sides of industry, but if I am responsible enough, as a trade union official, to recognise the difficulties with which British industry is faced at given times—particularly at the present time, and in the next few months—and to pursue a policy of speaking of restraint to the workpeople, am I not asking for more irresponsible people to assume the leadership in the trade union movement, with dire consequences to our economy?
This is one of the really "class" Budgets and "class" Finance Bills in the post-war period, and it is one for which this Government will be sorry. The Chancellor has said that the trade gap has not widened, but it certainly has not improved, For just a moment I will take a leaf out of the book of the hon. Member for Ilford, South (Mr. Cooper) and indulge in a historical survey. In 1951 the Tory Party was charging the Labour Government with leaving us with a bankrupt country, and was quoting gold and dollar reserves of £1,055 million as evidence of that. Today, our reserves of convertible currency are down to £990 million.
Irrespective of the blame that can be attached for that, and I would attach it to the party opposite, these are circumstances in which there should have been a Finance Bill that would have justified a pulling together by both sides of industry and all sections of the community. This Bill will not have that effect. It is a Bill of which the Tory Party will be ashamed, because it will only make our serious economic position worse than it ought to be.

6.2 p.m.

Mr. E. H. C. Leather: I hope that the hon. Member for Gloucestershire, West (Mr. Loughlin) will forgive me if I do not pursue him, as I could. We have heard all these arguments about Surtax and wage restraint time and again, not merely in the last three months but certainly during the eleven years that I have been in this House. There is obviously a clear party political difference between us, and I do not think that it would do any good to go over all the ground again.
I would only say to the hon. Member that I should like to think sometimes that he and his friends gave us at least the credit for holding our views as honestly and sincerely as they hold theirs. I do not dispute that their views are honestly held, but the implication of the hon. Gentleman's speech was that anyone who disagrees with him is a crook—

Hon. Members: Oh.

Mr. Loughlin: On a point of order—

Mr. Leather: It is not a point of order, and the hon. Gentleman knows it.

Mr. Loughlin: I very much doubt, Mr. Deputy-Speaker, whether it would be Parliamentary language on my part to call the hon. Gentleman a crook.

Mr. Leather: I am very pleased to say that the hon. Gentleman did not call me a crook. I said that was the implication of his remarks—but I do not wish to pursue the matter. I believe just as strongly that to confiscate 75 per cent. of any man's honest earnings, provided they are honest—and, if they are not, our law is quite capable of taking care of that—cannot be justified on any grounds of social justice at all but can, in fact, be justified only on grounds of sheer envy.
I was interested to hear the hon. and learned Member for Kettering (Mr. Mitchison)—and I am glad to see that he has returned to enliven our debate—assure us that he and his hon. Friends opposite were so arranging their affairs as to take care of their own Surtax liabilities in 1963. Perhaps I had better consult either the hon. and learned


Gentleman or his hon. Friend the Member for Gloucester (Mr. Diamond) professionally to find out how it is done. I wish I knew.
The regulators have taken up much of this debate. I still believe, as I said in the Budget debate, that these represented a courageous and imaginative approach and I have no hesitation in supporting the approach. I think that my right hon. and learned Friend has done the House and the country a great service in bringing forward these new ideas about economic regulators. This is the first time they have been debated or argued at any great length but, having sat through much of the Committee stage—and when, unfortunately, I had to be absent at times, I read the reports of the proceedings very carefully—I am overwhelmingly convinced that neither of these chickens will run. I am quite convinced of that.
I believe that the propositions advanced by the hon. and learned Member for Kettering about the payroll tax were completely right. To apply a tax like that to policemen, to school teachers, to nurses, to farm workers and to all the various classes of people of whom we are desperately short simply cannot make any kind of economic sense, and I hope and pray that we never get round to using that regulator.
I feel the same way about the Purchase Tax regulator. I can well remember sitting here many years ago, in the days of Sir Stafford Cripps and his great doctrines of austerity. The slogan then was that we would stop inflation by mopping up surplus purchasing power. I never found anyone in my constituency who ever had any surplus purchasing power. I have certainly never had it myself, no matter how hard I have worked or by how much the good Lord has been kind enough to increase my income.
In fact, one never did mop up surplus purchasing power. This exercise was tried time and time again, and I think that the last and most disastrous example we have had in this Government was the unfortunate "pots-and-pans" Budget. when Purchase Tax was put on household utensils. We all know perfectly well that it did nothing whatever to stop inflation. It did not mop up any surplus purchasing power at all.
Surely, we have now had enough experience of this utterly wrongheaded economic thinking, which seems to exist nowhere in the country but in the Treasury, to know that every single time we have raised taxes to try to counter inflation, to mop up purchasing power, the effect has been the same. The 80 per cent., roughly, of the community who are in a position to take counteraction, do so. That means not merely the trade unions but everybody who works for a living in one way or another. The British people are far too acute and far too intelligent to be caught napping by something as blunt and dull as this.
The remaining 20 per cent, of the community, the people on small fixed incomes, cannot take counter-action, the whole thing balances out in a matter of a few months at a higher level, and they are left even further behind than they were before. If my right hon. and learned Friend imposes this tax, I believe, I am sorry to say, that the same thing will happen again.
I admire his courage and his imagination, and I congratulate him in that I think he has done a great service in having brought forward these proposals so that they could be really seriously considered and argued in this House and by the public, but I do believe profoundly that now that that has been done the overwhelming weight of the argument is against both, and I hope that he will reconsider them both very seriously.
There is one more point I should like to make. All through these debates from the very beginning, whatever Clause we were concerned with, whatever the subject under discussion, the Chancellor himself and all of us have constantly been coming back and back, as we have been forced to do by the logic of the argument, to the problem of the balance of payments, the need for exports and the stability of the £. I do not think there was one Clause, with the possible exception of that about relief to the victims of Nazi persecution, on which we were not sooner or later considering the effect of it on the balance of payments and the expansion of British industry.
My right hon. and learned Friend has said time and time again that this is in the forefront of his thoughts. We all of


us support him wholeheartedly in that policy. I still believe, contrary to the party opposite, that the Surtax concessions are very important in that context.
We had a considerable debate initiated by my hon. Friend the Member for Peterborough (Sir Harmar Nicholls) on export tax incentives. My hon. Friend the Member for Kidderminster (Mr. Nabarro) and the tax committee of the Federation of British Industries—and we could not have two more sound pillars of orthodox taxation policy—were dead against the measures which my hon. Friend the Member for Peterborough was suggesting. As the Chancellor knows, for we have discussed it over the years, I have always accepted the view that any kind of deliberate adjustment of our tax structure to assist exports is probably unpractical or impossible.
I just want in finishing my speech to say, with whatever authority I can command as having some experience in this specialised field, that I have now come to the opposite conclusion. I am quite convinced that if my right hon. and learned Friend does not find some solution of this problem he is not going to solve the exports problem and the balance of payments problem as he is trying to do, and in this objective, which we all support, he will not succeed.
It is really not good enough for my hon. Friend the Financial Secretary—I am sorry that he has left—to go on saying that we have persuaded other countries to drop these things. We all know perfectly well that they have not dropped them. It really was not good enough for my hon. Friend, whose skill and ability I admire immensely, to say that we have Purchase Tax and that when somebody exports from this country he does not pay Purchase Tax and that this compares with the remission of turnover tax paid by the Germans. There cannot be the remotest comparison between these two things because in the field of capital exports, with which we are here primarily concerned, Purchase Tax does not apply.
Our manufacturers competing with the French or the Germans or the Italians for a major power station or railway installation, those sorts of things, do not pay Purchase Tax on those things

in the home market. In those countries there is a turnover tax paid by the manufacturers who are our competitors. Whether it is done officially or unofficially, no matter how it is done—it is done and we know it is done, and the proof has been sent to Ministers time and time again—the local tax man, whoever is the authority, says, "If you need a 7 per cent. margin to beat the British we will remit 7 per cent. of the tax on this order to allow you to do it." We all know that happens.
I do implore my right hon. and learned Friend to look at this seriously again, because I think that this is a major gap in his arrangements for what he wants to do and in which all of us support him.
We have in this Bill Clauses 17 and 18 relating to tax reliefs for development purposes throughout the Commonwealth. Our partners in the Commonwealth have no trouble in arranging discriminatory taxes to encourage the things they want to do. That is why these Clauses have arisen. In Jamaica where there is a trade union and Labour Government, because that Government are anxious to encourage the capitalists, they will give a 10-year tax-free holiday. This is done with the full blessing and on the initiative of the trade union leaders, because they know this is the way to attract capital into their country and raise the standards of their work-people. In Barbados, in Trinidad, in all these other countries, we find this succeeding because they are encouraging it in the right way.
We here are told that it is administratively terribly difficult. We are asked how we would distinguish—this is the point my hon. Friend the Member for Kidderminster made—between the direct exporter and the people who supply all the parts. I find that most of my friends in industry are quite prepared to accept the logic of this tax concession. The tax concession goes to the man who takes the risk and makes the effort to export. It is perfectly true that somebody else supplies, for instance, the wheels and tyres of the motor car, but that to him is home trade; there is no export risk; there is none of the enormous cost and problem of export. The man who actually takes the risk, I believe, must have the incentive, and I implore my right hon. and learned Friend to look at this one again.

Mr. Diamond: I suspect—

Mr. Leather: I was trying to finish.

Mr. Diamond: There is no hurry.

Hon. Members: There is.

Mr. Nabarro: Yes there is. Others want to speak.

Mr. Diamond: I merely wanted to ask the hon. Gentleman, although I agree with the latter part of what he said, if he would explain his point about the turnover tax. I am trying to follow his argument. When that turnover tax is reduced—suppose it is remitted—and the manufacturer pays ordinary, straightforward tax, what advantage has he, and how, over the British manufacturer who is already competing paying ordinary, straightforward tax?

Mr. Leather: I thought the hon. Gentleman was a chartered accountant. He knows the answer to that question as well as I do. You have just returned to the Chair, Mr. Speaker, and I suspect that had you heard what we were both saying you would probably have ruled us out of order, and I imagine that if I were to pursue the answer to that question I should be completely out of order.
I should like to say finally to my right hon. and learned Friend that I support him. I think he has done something which was courageous and of great value in bringing forward the proposals he has, but I hope he will consider the arguments, which I believe to be overwhelming, against the use of these regulators, and I hope that he will consider again very seriously this problem of incentives to exporters, because it really will be no consolation to the country if we are to starve like gentlemen so long as the sacred principles of the Inland Revenue are preserved. The sacred principles of the Inland Revenue, I believe, ought to be breached, and must be breached if we are to make the advances in the export markets which we want and if industry is to make the progress which my right hon. and learned Friend wants, and I hope and pray that he—I hope, indeed, it will be he—is going at long last to solve this balance of payments problem which has haunted every Government since 1945.

6.20 p.m.

Mrs. Eirene White: I am a little puzzled by the attitude of the hon. Member for Somerset, North (Mr. Leather) whose speeches I always listen to with interest. He has congratulated the Chancellor six times in the course of a relatively brief speech and yet the entire burden of his speech was to say that the proposals in the Finance Bill were either mistaken or inadequate. I therefore find it a little difficult to know on what act of courage the hon. Member is congratulating the Chancellor.
I have not been quite as active this time as I have been sometimes in discussions on the Finance Bill, but that at least gives me the advantage of coming to the Third Reading with a relatively fresh mind. I recognise that we are discussing the Bill in its final stage in the House in economic circumstances which are causing disquiet. When the hon. Member for Louth (Sir C. Osborne) was making his speech there was considerable hilarity below the Gangway opposite.

Mr. Nabarro: The strongest terms of disapproval among my hon. Friends and myself, but there was no hilarity on my part.

Mrs. White: There was derisive laughter, and the usual interventions from the hon. Member for Kidderminster (Mr. Nabarro) who kept reiterating the word "miserable". All I suggest to the hon. Member is that possibly he did not have on his breakfast table this morning the same newspapers that I had on mine. I do not know what the hon. Member reads. Possibly Sporting Life is his first paper.

Mr. Nabarro: Mr. Nabarro rose—

Mrs. White: No doubt the hon. Member will be able to explain to the House later exactly what his breakfast table reading is. I have an assortment of newspapers. Among them are the two which are sometimes called in inelegant language the "posh" papers, The Times and the Guardian. It happened that this morning, when I was thinking of the Finance Bill in terms of the financial situation in which we would be asked finally to pass it, I read the leading article in the Guardian, and the


comments of the City Editor of The Times. Anybody who reads those two articles and comes here in a mood of complacency and utters the word "miserable" to the hon. Member for Louth has an inadequate grasp of the country's economic situation. I also had the benefit of reading Lloyd's Bank Review and I commend it to the hon. Member for Kidderminster.

Mr. Nabarro: I read it this morning.

Mrs. White: I congratulate the hon. Member. If he has done so, I am sure that he will realise that there are persons who are of at least equal, if not possibly superior, reputation to him as economists who take the view that our economic position is extremely serious. I hope to return to that subject before the end of my speech, but meanwhile I should like to make one or two comments on the three subjects which are the kernel of the Bill, that is, the two regulators and the Surtax proposals.
A great deal has been said in criticism from both sides of the House about both regulators. First, the Chancellor himself admits that they are excessively blunt instruments. We all appreciate that. There is something to be said from an industrial point of view, for example, for the payroll tax. There is something to be said for some kind of arrangement, possibly through National Insurance, for seeing that on the one hand we penalise firms which do not do all they might to economise in labour and, on the other, for seeing that there is a redundancy fund for workers made redundant if a firm goes in for automation. But we cannot discuss that on Third Reading of this Bill.
If we look at this from a purely industrial and not a fiscal point of view, there might be something to be said for some kind of quid pro quo on those lines, but this payroll proposal clearly has not been adequately digested in the Treasury, be-fore being presented to the country. At the beginning we had conflicting explanations from the Government. There was one moment when it looked as if the payroll tax was intended to be an industrial regulator, to economise in labour and to encourage the substitution of machinery for manpower. That one aspect was mentioned at the beginning but it was quickly dropped. Then we were led to believe that this was nothing at all

to do with industrial economy and the substitution of machinery for manpower but was a purely fiscal measure. Then various anomalies were brought to light and hon. Members have already pointed out the fears expressed by local authorities and people in public services that this transfer of people would lead to a vast amount of administrative expense without making one iota of difference to the economy.
One could think of thousands of anomalies that would have arisen. There are, for example, the various educational and charitable institutions which would have applied for exemption. One with which I have some connection wrote to me to say, "Dear Mrs. White: You will realise that our position will be made much more difficult if this goes through. Will you bring up our case in the House of Commons?" and so on. As I found it difficult to believe that this scheme would ever be operated, I have not wearied the House with these individual appeals which I am sure most hon. Members have received.
It is obvious that there would be anomalies in cases of this kind and also in industry. The cinema industry, with which I have had a long connection, is required by statute to employ a certain number of people in a cinema when a performance takes place. There would be a sense of injustice if one employee were penalised in a situation in which one could not economise in manpower anyway even if one wished to do so.
This, as I have said, is an ill-digested proposal. One is not against innovations in fiscal policy—far from it. We all like to think that people in the Treasury use their intelligence in these matters, but they must do so to better effect. It is a great pity that in one of the very few efforts on the part of the Government to bring some new device into our economy they should have got off to such a bad start on this one. It is very regrettable that in their first essay into something novel in our economic arrangements for many years this proposal should have been so ill thought out and should have met with such an unfavourable reception in all quarters of the House and in the country.
The other regulator, the increase in indirect taxation by Treasury dictate, is not new. We had that principle in the Purchase Tax although there it was not


just a fiscal matter. There was a reputable argument that knowledge that a change in Purchase Tax would take place only at the time of the annual Budget led to a reduction in purchases over the preceding period. There was a good deal to be said for giving the Treasury some leeway if it wished to introduce changes in Purchase Tax at some other period of the year and thus avoid a slack in purchasing. I believe that that was one of the main reasons for allowing these changes in Purchase Tax to be made.
This kind of regulator, however, has no such purpose. This, again, is a purely fiscal measure, falling on the just and the unjust alike, and one can well see how difficult it would be to operate except over a short period. We have already had discussions during debates on the Bill on the existing tax on motor cars and on other commodities subject to tax. If in certain circumstances, especially where exports were concerned, these taxes, for general fiscal reasons, were substantially increased by 10 per cent., we might have serious industrial consequences. Therefore, it also appears that this blunt instrument is too dangerous to use except possibly for short periods. There is also the strong argument of the hon. Member for Louth and the hon. Member for Somerset, North that whereas other people can adjust their earnings over a period to new standards of prices, those on fixed incomes are left behind. They and those on retirement pensions can never catch up as quickly with the rise in general prices. Therefore, I repeat that on both these regulators there has been too little thought. The criticisms have far outweighed the commendations.
The Surtax proposals constitute a third major part of the Bill. I do not need to go again into the arguments which we have used on this side of the House since the Budget. An hon. Member opposite said that the Budget was in two parts. We consider that it had a most unfortunate preface in the Health Service charges and that it has really three parts. We feel very strongly that in the economic situation in which we find ourselves that was a most undesirable step.
The Chancellor in his speech today commending the Third Reading of the

Bill said that among his major objectives had been restraint of personal consumption. I find it hard to see how a remission of Surtax of £83 million will restrain personal consumption. The hon. Member for Louth said that higher taxation encourages spending. I also find that very difficult to believe; but perhaps I heard the hon. Gentleman wrongly. In any case, I cannot see how a remission of £83 million will restrain personal consumption.
If one has more money it is true that some people will save it, but I suggest that many people who will have the benefit of the Surtax concessions will simply improve their standard of living. They will say to themselves, "We will take the family this year to Juan-les-Pins instead of the little place near Dieppe." That is the kind of thing that is likely to happen with the people who will get these tax remissions.
The Chancellor said that he wanted to improve incentives to effort and initiative. That was one of the reasons which he gave for the remissions in Surtax. We all remember the ridicule which my right hon. Friend the Member for Huyton (Mr. H. Wilson) poured on this as the great incentive to export. As he pointed out, a great many people who have nothing to do with exports will get the remission just the same.
In any case, I wonder whether these remissions of personal taxation have any connection whatever with improvements in our export trade. I just do not believe it. I am not an accountant and I am not a sufficiently skilled economist to know whether the suggestions made by the hon. Member for Somerset, North about more direct inducements to export are sound or not. I should not like to judge; I am not in a position to do so. However, I feel very strongly that, whether his proposals are good or not, just allowing Surtax payers to have a little more personal income is neither here nor there. Our export situation is very serious. One reason given by people for our going into the Common Market is that unless we have the cold wind of competition our industrialists simply will not manufacture for export or sell adequately overseas.
We have to ask ourselves whether the Surtax remissions really will meet the situation. I have been given some


examples by someone who has an unrivalled knowledge of our commercial and export efforts in certain parts of Africa. I choose three specific instances in which British exporters have just not come up to scratch. I ask hon. Members whether the Surtax concession affects this or not.
There was a new hospital to be built, and £2½ million was to be spent on it. A great deal of equipment for it was needed. Inquiries were sent to manufacturers in this country, Switzerland, Germany and Sweden. The response by the British manufacturer was to send a price list and say, "If you want any of these things, here they are". No delivery date or anything interesting was given. Yet the West Germans had people there by air within four days.
Special equipment for overhead irrigation was needed in a drought-stricken area. The development was to be in Israel, but the equipment had to be bought in Europe. Those concerned would not buy the British version because it was not suitable and they could get no delivery date.
Diesel engines were sent out for a railway. The engineers who bought them said they wished they had got them from somewhere else. The engines had not been fully tried out, and there were so many faults and difficulties with them that the engineers said that they were sorry that they had been patriotic and bought British.
There is another point on car exports. Going to some of our territories where one would hope to see British cars, one sees the Volkswagen and the Peugeot. It is only in the last year or so that the British car manufacturer has bothered to take any interest in the East Africa Safari race after the Volkswagen have got themselves in well there.
Will this attitude of mind be changed by giving Surtax remissions? I just do not believe that it will. On the contrary, I think that people who find that their personal lives are more comfortable through their having Surtax remissions will be not more likely but less likely to exert themselves to go out for the further exports which we really need if we are to maintain our position in the world. We are not maintaining our position in the world at present.
I end simply by drawing attention to the comments with which I started in the context in which we are being asked to pass this Finance Bill, so that we may judge whether it is adequate or not. The Guardian leader begins
A decade of Conservative remedies has failed to cure the United Kingdom's economic malaise.
It is interesting to note that we have now had ten years of Conservative administration, though we have had more than ten Budgets, because there were a couple of emergency ones.
If we look at the comments on our situation made by people who are perhaps better qualified than many of us in this House, we must agree that this year's Budget, far from being courageous, is inadequate, and that if it was based on miscalculation three months ago the Chancellor has failed in not having the courage to come to the House and say that he was mistaken. Instead of asking us to pass this Bill, he should have amended it in many respects. I find myself quite unconvinced by the arguments which have been advanced in support of the Bill, and shall join my hon. Friends in voting against it.

6.39 p.m.

Viscount Hinchingbrooke: This is the twentieth or twenty-first Finance Bill in which I have participated, and I am very glad to see the last of it. This is a tedious annual institution which is not in proportion to the needs of the times. It is like a Victorian novel which we are reading and rereading year after year. I represent quite seriously to the House that there is a case for shortening considerably the proceedings on the Finance Bill. The Treasury seems still to be obsessed by the idea that this has a significant effect on the major aspects of our economic life. If we are moving into a jet propelled age, it is no use going back to Trollope, except for light relaxation. One must read Ian Fleming or the hon. Member for Coventry, North (Mr. Edelman).
I have given the figures before in the House of the lamentable differentiation in the economic results in the year following a Finance Bill which was calculated to produce another effect. Time after time we have had a Budget and a


Finance Bill setting out a substantial deficit up to £800 million or £900 million below the line, followed by a deflationary situation in the country. Time after time we have set up a Budget and a Finance Bill with a large surplus, and this has been followed by a serious inflation.
Yet these Treasury pundits, these mandarins who sit behind the scenes, are absolutely convinced that they can safely put in front of the Chancellor of the Exchequer a set of figures which will produce a definite economic climate at the end of the day. For days and days and weeks and weeks in this House, on Second Reading, in Committee and on R enort—this year, fortunately, less tediously elongated than previously—we have tried to subtract £20 million here and there. The Chancellor has come in at the last moment and has made a small concession and everyone has glowed with pleasure. It is all very delightful and edifying in this Chamber, and no doubt we practise our debating skill in the process. But it has not the slightest effect upon the basic significant facts which emerge in the course of the following twelve months.
I have with me figures of the marked difference between the actual borrowing requirements of the last three years and the estimated borrowing requirements, as set out by the Chancellor of the Exchequer. They swing about wildly—as wildly as the indications I have given about inflation or deflation. For the year 1958–59 borrowing requirements proved to be £54 million more than was estimated; in 1959-60 the figure was £307 million less; in 1960–61 it was £76 million more.
These budgetary figures deal with over £6,000 million a year, which is what we annually raise by taxation, but the difference between £5,900 million and £6,100 million—about £200 million—has not the smallest effect upon a busy, humming economy which annually produces £22,000 million. An overseas insurrection, a cataclysmic change of fortune, devaluation in another part of the world —anything one likes to imagine as inn act of God—has a much more marked effect on the British economy than these trifling details we toy with, sometimes so zestfully and sometimes so listlessly, at this time of the year.
There is a serious case for the Treasury to consider dealing in very much more violent terms with the budgetary situation—not so much in the sector of increasing or reducing taxation but rather in loan, expenditure and subsidies or redemption of debt so that a swing is produced of about £1,000 million —not just these small figures—if one wants to say that one is using the Budget as a major instrument for rectifying errors in the economy. Otherwise, we must go back to the Victorian ideas of Mr. Gladstone and use the Budget in such a way as to get the minimum amount of money necessary to discharge the Government's functions in society and leave it at that. We cannot go on pretending that the present system of Budget and Finance Bill has a marked effect on the economy.
I want to refer to the Clause in the Bill that provides for the regulator which increases fiscal duties. I believe that this is a powerful weapon, and I am glad that the Chancellor of the Exchequer had the idea of introducing it and that the House has accepted it. To be able to make a swing of 10 per cent. each side of the normal, according to the state of the economy, in any particular month, is a major advance and is a small sign of the basic improvements I would like to see brought about in budgetary techniques in the coming year. To be able to increase taxation suddenly by £200 million is quite a formidable thing. If the Chancellor uses the other regulator as well he will raise £400 million altogether.
That is a great deal better than the effort in the "pots-and-pans" Budget introduced by the Home Secretary when he was Chancellor of the Exchequer. The trouble with that Budget was that it was an irritant and so induced a wage claim, which completely wiped out the effect of the irritant within twelve months. But £400 million is a sledgehammer compared with what has been used before and it should be extremely effective.
It will produce a highly important result. I must point out that if the Government are serious about going into the Common Market they will deprive themselves immediately of the regulator they have just invented. That is one reason, among many, why I hope that they will think again before sailing away into the


blue with these attractive countries across the Channel. Why should we deprive ourselves of a useful weapon, which we have only just invented, by marrying up with these Common Market countries? It seems inconceivable to me.
The real basic evil that besets us at the moment is that the Government machine and the expenditure of taxpayers money are far too intermingled with the ordinary natural rights of the private sector of the economy. That famous economist Colin Clark said that any free democracy where the State spent more than about 25 per cent. of the national income would, ipso facto, produce a secular inflation. That has been proved by experience in this country since the war.
The Estimates have increased now to 29 per cent. of the national income, and the Conservative Government are back to the position in which they were in 1954—which is not a very good date because, if I remember aright, it began the big inflation of 1955 and 1956 which had to be put right by the present Minister of Aviation the following year.
It looks now as if Mr. Colin Clark has been proved right a second time. The Government are taxing too much and are spending the taxpayers' money in addition to the inclination of the great generality of the private citizenry to spend money. People are definitely prepared to spend and will go on spending money up to what they conceive to be their scale of living by every possible means, if they are allowed to do so, short of physical controls and war-time regulations. They will get the money if they have to beg, borrow or steal it. They will disinvest. They will demand higher salaries and higher wages in the discharge of what they feel to be the functions of themselves and their families in a civilised community. If the Government go on taxing and spending the tax money on top of that expenditure, they will create a secular inflation.
It is therefore the prime duty of the Government to get away from Lord Keynes and to make an enormous sacrifice in their own spending power and to restore the fortunes of the

country. When I hear my right hon. and learned Friend the Chancellor of the Exchequer starting to talk about the dangers of the future, inevitably starting his speeches with threats of new impositions, I wonder whether we are to get from the Government that serious, consequential reduction in their spending which alone will restore the situation.
The Minister of Aviation did that in 1958. He put an immediate ceiling on Government expenditure and that had as powerful an effect as his other measures. I trust that my right hon. and learned Friend will do the same.

6.52 p.m.

Mr. John Diamond: What I am grateful for most is that the Chancellor will not follow the actions of the Minister of Aviation in fiscal matters and plunge us once more into the greatest economic crisis which we have had since 1945, to use the words of the Minister himself when he was Chancellor.
I can find practically nothing in what he said about which to agree with the noble Lard the Member for Dorset, South (Viscount Hinchingbrooke). I find it impossible to follow his suggestion that what is in the Budget is of little account. Of course, the success of the country depends not on the efforts of Ministers or Members of Parliament, but on the efforts of every man and woman in the country, but the Budget makes a contribution because it is an indication and a help and a guidance and it encourages or discourages. The expenditure represented by the Budget is only a small proportion of the country's total production, measured in terms of incomes, but it still gives some guidance. It is because this Finance Bill gives the wrong kind of guidance that I criticise it completely.
The noble Lord will have noticed that he alone supports the regulator which is known as the payroll tax. He alone of those who have spoken this afternoon has supported that tax, and those of us who are keen on going into the Common Market will therefore not mind very much if the payroll tax has to be thrown overboard—I have not considered whether it will or not—in the process of greater activity, greater production and sharing with other members of a civilised community many things and a great heritage and a great tradition.

Viscount Hinchingbrooke: The hon. Member for Gloucester (Mr. Diamond) is quite right to say that I support the payroll tax, but when I was making the point about the Common Market I was referring to the other regulator, the fiscal tax. It is that which will have to be abandoned by our joining the Common Market.

Mr. Diamond: I am grateful to the noble Lord. I understood that he was referring to the payroll tax.
My anxiety about the Bill is that, in the sense that it affects the economy, it does so in the wrong way, paying no attention whatever to the serious underlying circumstances. That was particularly to be noticed during the speech of the hon. Member for Louth (Sir C. Osborne). What the hon. Member was saying he was obviously saying with complete sincerity, but the noise below the Gangway on his own side of the House made it impossible for him to continue, as he said. The comments and jeers on his own side prevented him from continuing, but those same hon. Members who jeered and who subsequently spoke criticised the Government. One criticised the payroll tax and others criticised both regulators, but they all strongly criticised the Government.
It is a great pity that an hon. Member should not be given a fair hearing when he desires to express his views, however unorthodox they may be, or unacceptable, or surprising coming from a particular side of the Chamber. An hon. Member should not have to say that he has been put out of order by his own side and will therefore have to sit down and not continue his speech.
The hon. Member for Louth was making what I thought was a most valuable contribution about lack of confidence, to which he was directing attention. It was those remarks to which hon. Members opposite objected so much, but they can be proved by anybody who cares to look at the finest indicator of confidence which there is—the index of market prices. That index takes the form of an inverted cone. One starts at the bottom of the cone at the beginning of this year and mounts up until one reaches 22nd April, Budget Day. From there on one slithers down fast and the curve was still slithering when I last saw it this morning. That is the confidence

which hon. Members opposite and those they represent have in the present situation.
The hon. Member for Louth was completely justified in expressing anxiety. I express the same anxiety and draw immediate attention to those parts of the current Finance Bill whose effects are unwise in the present situation. I refer first, as one must, to the Surtax provisions.
I do not know whether the House appreciates the size of the Surtax reliefs. We have mentioned the figure of £83 million, but I want it to be understood and fully grasped by those who do not deal with figures as easily as some of us that £83 million is not only one-half of the total Surtax, but is in addition to enormous Surtax relief which has already been given during the period of Conservative Government.
I will give only a few examples. A typical example is that of the family man who has two children and who earns £10,000 a year. Over the past ten years he has already had £1,400 a year relief and he is now to get more or less the same amount in one fell swoop. I do not know how hon. Members opposite regard that relief, but I do so by glancing at the figures of the earnings of manual workers, 99 per cent. of whom earn less than the relief which this class of Surtax payer is to get in one year, quite apart from what such Surtax payers have already received.
The £5,000 a year man—beloved of the Chancellor—who has two children was getting £700 a year relief before the Budget. He is to get another £450 a year. I regard that by comparing it with the income of every married couple in my constituency of Gloucester living on a pension. Such a man gets more in Surtax relief from one Budget than a married couple living on a pension get in a whole year. That is the sort of comparison to make. Are hon. Members opposite surprised that we regard this as bitterly socially unjust and likely to do more damage to the relations which are essential if this country is to pull itself out of its production problems?
These Surtax reliefs have been justified partly on the ground of incentive and partly on the ground of an overdue reform. The Chancellor justifies them on the ground that they are an incentive.


The Financial Secretary knows that to be nonsense, and he does not repeat it. He goes on the other leg of the argument and attempts to justify them on the ground of being an overdue reform, as he pointed out yesterday.
On the ground of incentive, it would bore the House to repeat the arguments. Said in one sentence, no argument has ever been produced in favour of them. There are four serious considered Reports which give evidence to the contrary. There is the P.E.P. Report of 1960, the Medical Research Report of 1959, the Royal Commission's Second Report of 1954, and the T.U.C. Report before that. All those Reports came to the same conclusion, and hon. Members might also have read the interesting comments of Professor Break of Canada who looked at our taxation system quite objectively and reached the same conclusion as the Reports to which I have referred.
It is utter nonsense, or, as I was guilty of saying on a previous occasion, utter poppycock, to say that giving Surtax reliefs will encourage production, and it is also incorrect to say that this is an overdue reform. The reason the Financial Secretary claimed it to be an overdue reform arose out of the allegation I made earlier, that what we should be looking to was our position in terms of production and productivity compared with other nations. I should have thought that the fact that we are at the bottom of the league table, and have been for the last two years compared with other productive hightly-skilled and highly-capitalised manufacturing nations, was one of the most important things to consider in our economic situation. All that the Financial Secretary said was, "Look where we stand in the league of tax liability". That is what appeals to hon. Gentlemen opposite.
The Financial Secretary went into considerable detail to show that in terms of tax liability a man in this country earning £3,000 a year, if he added an extra £1,000, would get more to keep than his opposite number in Germany, that he would get less than his opposite number in the United States, and therefore we were not too badly off. I am content with the fact that what we regard as important is the league table of comparative productivity, and that what hon. Gentlemen opposite regard as

important is the league table of where we stand in terms of tax liability.
Let me now deal with the argument about whether this was an overdue reform. I draw the attention of the House to the effects of the increase in the National Insurance charges and of the current Budget. Let us consider the two together to see whether there is any justification for what the Financial Secretary said two days ago. If we take the two together, we realise that the increase in the flat rate contribution for the ordinary person over the last five years is £13 11s. 8d. a year. I can give the House the details if necessary. Now let us consider whether I am justified in saying that the Government treat the community as two nations in their tax policy.
Consider the family man earning £3,000 a year and upwards. This is the case which the Financial Secretary loves so much and believes in. As a result of the last five Budgets, this man, after taking into account the National Insurance contributions, saves approximately £260 a year. The man earning £5,000 a year saves £860. The man earning £10,000 a year saves approximately £2,000. The man earning £20,000 a year saves approximately £3,000.
I have dealt with that group because they represent approximately 1 per cent., the tap 1 per cent., of the population, and I have shown the benefit which they get out of what I call the last two Budgets added together; benefits varying between £3,000 a year and £260 a year.
Now let us consider the bottom 95 per cent., that is, those earning £1,250 a year or less. The man earning £1,250 a year has had no advantage over the last five years when he takes into account his National Insurance contributions. For all practical purposes he is all square. The man earning £1,000 a year—£20 a week—is £5 2s. 9d. a year worse off. The man earning £600 a year—the average £12 a week man—finds himself £12 18s. 4d. worse off as a result of five years of Conservative tax reduction Budgets and the increase in National Insurance charges.
One is entitled to regard a Finance Bill such as we are discussing today, which puts an additional burden on the bottom 95 per cent. of the population by way of taxes—if one includes, as I


properly do, the insurance contribution as a tax—and takes off those earning more than £3,000 a year very considerable charges indeed, as a demonstration that the Government identify themselves with the top 1 per cent. and care naught about the bottom 95 per cent.
The Chancellor of the Exchequer uses as his image a man earning £5,000 a year, as he did in his Budget speech, and the Financial Secretary uses as his image a man earning £3,000 a year. Naturally, as a younger man, a bachelor, the Financial Secretary places his target a little lower. No doubt as the years go by it will rise to the £5,000 a year man. I believe that they are incapable of understanding what the ordinary man feels about this Budget. If that is not the case, I cannot conceive of them carrying through the proposals.
I shall say very little about the tax regulators, because we have discussed them at length. There has been no support from this side of the House for the second regulator. I supported the first regulator during the Committee stage, and I repeat that it is refreshing to have a new idea. I believe in controls, and, unlike the noble Lord, I believe that we need more planning instruments and not fewer. I said during the Committee stage that this was the greatest test of the objectivity of any hon. Member on these benches, because we are being asked not to support an idea like this in principle but to give a Tory Government these powers at this juncture.
It has been demonstrated that I was wrong in giving that support because, although one can justify giving powers to the Government to use between Budget times, one cannot possibly justify aiding a Government to get power by the back-door to levy taxes by Statutory Instruments when in fact what they are doing is avoiding debating them in the House in the normal process of the Finance Bill. Inasmuch as it is now quite obvious that what is in the Government's mind is the possibility of using one or both of these regulators, I say that they have been guilty of the worst possible faith in attempting to get these powers—as they are succeeding in doing —at this time.

7.10 p.m.

Mr. Gerald Nabarro: It is always a pleasure to follow the hon. Member for Gloucester (Mr. Diamond), who talks on fiscal matters with such great authority. He will not expect me to agree with his political deductions from what is contained in the Finance Bill. Throughout our debates since the Budget, I have given broad and general support to my right hon. and learned Friend the Chancellor of the Exchequer for the purposes of his Budget this year and the Finance Bill which we are debating today, which implements it. The critical words used by the Chancellor are to be found in his Budget statement of 17th April, when he said:
The first and obvious need is a marked improvement in our balance of payments.
He continued later to say:
Nevertheless, we have a long way to go in fostering the growth of our exports. We must ensure that opportunities are not lost because there is an overload of domestic demand on our productive resources. Nor can we afford to have our competitive power damaged by rising costs."—[OFFICIAL REPORT, 17th April, 1961; Vol. 638, cc. 797–8.]
The financial effect of the Bill's provisions is to give the Chancellor a surplus above the line of £506 million and an overall deficit, to be met by borrowing, of £69 million. Although I have none of the facilities or resources available to me that are available to the Chancellor, in my judgment those figures are approximately correct in current circumstances. It is for that reason that I have voted against the Chancellor only on two occasions in the whole of our debates on the Finance Bill—and they were on sectional issues. First, I voted against him on the increased fuel-oil duty, of which I strongly disapprove. I gave him methods which I suggested would have raised for him an approximately equivalent sum of revenue. Secondly, I voted against him in regard to Schedule A Income Tax. But that did not derogate in any way from the general support I have given his budgetary provisions.
I am sorry that my hon. Friend the Member for Louth (Sir C. Osborne) is not here at the moment. I regret that he should have painted a picture which was lamentably gloomy and unnecessarily miserable. He exaggerated every facet of our economic and financial deficiencies and gave none of the points


which he might have called in aid as being encouraging signs. This is not an economic debate, but the purposes of the Finance Bill, which I demonstrated a moment or two ago—I hope succinctly—in the Chancellor's words during his Budget statements, are perfectly clear to all of us, and I quarrel at once with my hon. Friend the Member for Louth and many right hon. and hon. Members opposite who have complained about the rate of growth of our economy. Although he did not say so specifically, my hon. Friend the Member for Louth was evidently referring to a reply given by the Chancellor on 4th July, to the effect that production per head over the last year had fallen by 1 per cent.
My hon. Friend the Member for Louth exaggerated when he said that economic and financial matters had deteriorated very much since the Chancellor's Budget statement on 17th April. That is just not true. Of course, we are facing extremely anxious times, which the provisions of the Finance Bill may help to remedy, but the facts of the situation were given by Professor Paish of London University, in the Listener, published this morning. He took up the words of the hon. Member for Grimsby (Mr. Crosland) and said:
A simple calculation from the index of gross domestic product per man-hour worked gives us a cumulative rise of 1·9 per cent, a year from 1948 to 1953, of 1·7 per cent. a year from 1953 to 1957, and of about 3 per cent. a year from 1957 to 1960…These figures do not allow for the effects of any lengthening of annual holidays, or for the growth in the numbers of part-time women workers. To allow for these would presumably slightly increase the rate of growth in output per hour worked.
Those are significant figures. If production per man-hour has been increasing over the last four years by 3 per cent. per annum, as Professor Paish indicates—I presume authoritatively—that is not a position which should give any comfort to hon. Members opposite who complain that we are always at the bottom of the league. On the contrary, it shows a continuous and, in my judgment, reasonably large rate of expansion.
I want to make a short point on Clauses 9 and 30, which concern the regulators. Not a single speech made during the last four hours has failed to make reference to them. They should not be taken in isolation from the other similar instruments already in the Chan-

cellor's hands. Before the Chancellor took the powers under these Clauses, there were three similar instruments in his hands. There was the special bank deposit scheme, there was the Bank Rate, and there were the hire-purchase restrictions, legislated for periodically in the form of Statutory Instruments. Those are three regulators, to which the Chancellor has now added two more, and I judge those regulators by their effect in aggregation, if they were all used.
In the past I have often proclaimed, both in the House and outside it, my belief that former Chancellors of the Exchequer, notably Conservative Chancellors, did not have adequate economic and financial powers, in a free society, for regulating the economy in conditions of exceptional difficulty. It is for these broad reasons that I support these Clauses, which give two additional forms of regulation which, added to the three that I have named already in the hands of the Chancellor—giving him five regulatory powers in all—used partially or wholly, should give him, in the anxious times to which he has referred, adequate means to deal with the fluctuations in our economy.
I want to say a word in particular about Clause 9. I do not want to try to transform this into a Purchase Tax debate, but I appeal to my right hon. Friend to consider earnestly what would be the effect on Purchase Tax schedules if he used the regulator provided by Clause 9 literally. At present the Purchase Tax rates are 5 per cent., 12½ per cent., 25 per cent. and 50 per cent. If he used the first regulator upwards at 10 per cent., the 5 per cent. rate of purchase tax would become 5·5 per cent.; the 12½ per cent. rate would become 13¾ per cent.; the 25 per cent. rate would become 27½ per cent., and the 50 per cent. rate would become 55 per cent. If the Chancellor applied half that level of regulation the rates would change from 5 per cent. to 5·25 per cent.; from 12½ per cent. to 13·125 per cent. from 25 per cent. to 26·25 per cent., and from 50 per cent. to 52·5 per cent. [Laughter.]

Viscount Hinchingbrooke: Go to the top of the class.

Mr. Nabarro: I am being suitably stimulated by my noble Friend saying "Go to the top of the class."
This is not a rehearsed speech I hasten to assure you, Mr. Speaker. The plain fact of the matter is that the calculation of these very difficult rates in commerce and industry would be highly wasteful of resources. I beg my right hon. and learned Friend to remember that the wholesalers may well have business accounting electronic and electrical machines available, and computers of one kind and another, to help them in these calculations. They may well be able to use slide rules. But the multiplicity of retailers who have to check the paper work and details as to rates of this kind generally have no such advantage and would be seriously embarrassed.
I make this suggestion, therefore, to my right hon. and learned Friend. If he uses his regulator under Clause 9 and applies it to Purchase Tax, will he simultaneously use his powers under the Finance Act, 1948, to reduce Purchase Tax to round figures which are much easier of calculation and in consonance with the currency? I mean by that figures which divide equally into 1s., 2s. or 5s. without involving fractions of pence.
I should now like to say a word about Clause 28. The Master of the Rolls, Lord Evershed, said on 26th June—I quote from The Times Law Report of 27th June—in the context of Income Tax Schedule E:
It shocks me—it really does. That is why Income Tax is a sort of game, a battle of ingenuity, unrelated to any principle or commonense or ethical considerations, and it is extremely bad for respect for the law. I can only plead that some time, some day those who instruct you—
the learned judge was referring to my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), who was appearing as a Silk for the Inland Revenue,—
will pay regard to the prestige of the law and possibly the welfare of society. Originally Schedule E was confined to a very confined class but I do not see why the distinction should be continued.
Their Lordships, Lord Evershed and two other judges, thereupon dismissed the appeal of a bank manager to have his subscription to the Devonshire Club and the Royal Automobile Club paid by the Midland Bank. They dismissed the appeal and disallowed such a charge.

Mr. Douglas Houghton: I think the Court of Appeal was quite right.

Mr. Nabarro: I am not commenting adversely on the judgment of their Lordships in any way. I am saying that it is grossly unfair that that appeal was dismissed, whereas I am allowed to charge my subscription to the Carlton Club against my Income Tax. [HoN. MEMBERS: "We do not."] I am greeted from all sides by my hon. Friends saying that they do not. I believe that I am the only Tory Member of Parliament who charges his Carlton Club subscription against his Income Tax—of course I am. My right hon. and learned Friend the Chancellor need not nod his disapproval at me. It is grossly unjust of course. I am saying to my right hon. and learned Friend that the truth is, in regard to Schedule E and Clause 28, that his provisions in this Bill relating to Income Tax generally are grossly inadequate to meet the muddled situation and the jungle which has been created in Income Tax law. It is so bad that hardly any layman can today understand the Income Tax law. It is so bad that we have that kind of derogatory statement made in respect of our legislators by a learned judge.
My right hon. and learned Friend, himself a distinguished lawyer at one time, will know exactly to what I am alluding in these matters. But I discern just a ray of hope from his concluding words when he presented his Budget—I shall harass him relentlessly in the next twelve months—

Mr. Selwyn Lloyd: And I shall harass my hon. Friend about his subscription to the Carlton Club.

Mr. Nabarro: My right hon. and learned Friend threatens that he is going to harass me about my Carlton Club subscription. What a disgraceful thing with which to threaten a private Member of this House! After all, the Economic Secretary is a member of the Carlton Club, the Financial Secretary is a member also—

Mr. Speaker: Order. We are here concerned with the Third Reading of the Finance Bill.

Mr. Nabarro: Yes, Mr. Speaker. I am endeavouring to relate my remarks


to Clause 28. I will not continue in this vein.
I want to quote to my right hon. and learned Friend his own words in his Budget statement:
I readily acknowledge that there is still much to be done in the reorganisation of indirect taxation, and in the increasing of incentives throughout the economy."—[OFFICIAL REPORT, 17th April, 1961; Vol. 638, c. 823.]
I hope that my right hon. and learned Friend will not confine his efforts to indirect taxation. He should apply himself along the lines of the recommendations made by the Income Tax Codification Committee, which sat for years under Lord Justice Macmillan in the 1930s. He should apply himself along those lines if he really wishes to give incentives for higher production and a reduction of the wastage of resources throughout the economy which result from this jungle of Income Tax law. In the ensuing twelve months my right hon. and learned Friend should apply himself to tax simplification and reform.
With those few words of criticism and with, broadly, words of commendation and support for my right hon. and learned Friend—he should not laugh at me when I support him. He cries when I attack him—

Mr. Selwyn Lloyd: I was exhibiting pleasure—modified pleasure.

Mr. Nabarro: My right hon. and learned Friend's facial expressions are incomprehensible to me.
I support him broadly in his budgetary endeavours and hope that his objectives are gained. It will be a very delicate and difficult state of affairs this autumn if the trends in our balance of payments, if the trends in the inflationary situation to which I referred earlier, should continue. I wish my right hon. and learned Friend well with his budgetary proposals and I intend to support the Third Reading of this Bill.

7.28 p.m.

Dame Irene Ward: My right hon. and learned Friend has expressed three hopes for his present Finance Bill. He said that he believed it would be a disinflationary Measure. He hoped that it would cut personal consumption and that it would encourage saving. With all these objectives I find

myself in agreement, but I am bound to say that I consider the psychology of my right hon. and learned Friend to be completely and absolutely incorrect. The speech of the hon. Lady the Member for Flint, East (Mrs. White) showed a greater appreciation of how human beings "tick" than was apparent from most of the speeches made by hon. Gentlemen opposite and by my hon. Friends.
I wish to say a word about Surtax. I do not complain about it at all. I am not involved and so I can speak quite freely. But I wonder whether it has occurred to my right hon. and learned Friend that when anyone obtains a windfall, whether it is from a reduction of the standard rate or by additional earnings or by a reduction in Surtax, on the whole, people tend to spend a little more? That is the way life works.
If I happen to get a little additional income from making a television appearance, giving a broadcast or writing an article, I think to myself, "I can spend a little more on a hat". That is the way the human being works. Although, of course, a great many people put additional personal revenue into savings of one form or another, to assume that by a reduction in Surtax personal consumption will be restrained is a most extraordinary assumption. I suggest that my right hon. and learned Friend might come one day and lunch or dine with the women Members of this House. They could give him a lot of instruction about what happens in matters of this kind.
In regard to personal savings, I think it would have been more helpful if my right hon. and learned Friend had given a little more incentive to small savers. National Savings committees have done remarkable work during the last year. I think they would have appreciated something coming from my right hon. and learned Friend through this Finance Bill to make their work a little easier as they go round collecting for the National Savings Movement week by week. It is no good Treasury Ministers riding above the world and not seeing what is going on underneath them. Without entering into any argument about it, because that would not be in order, I do not think that the ordinary personal investor is likely to be encouraged by what has happened in respect


of war stock. That, I think, was the normal, ordinary reaction.

Mr. Speaker: That may be, but I have some difficulty in relating it to the terms of the Finance Bill in the Third Reading debate.

Dame Irene Ward: A number of hon. Members have had one or two "goes" about that. I do not intend to pursue the subject, Mr. Speaker, but my right hon. and learned Friend opened the debate on Third Reading by saying that he hoped the Bill would encourage personal savings. Therefore, I do not think I should be out of order in saying that I do not think his interpretation was correct.
I wish to say something about the regulators. My right hon. and learned Friend nipped me up immediately—bit my head off, in other words—when I referred to the fact that if the second regulator were imposed throughout the country, particularly on local authorities, and if rates had to go up, it would further embarrass those living on small fixed incomes. My right hon. and learned Friend said that, after all, they are the employers. I wish to point out that if the regulator is meant to encourage economy within local authorities, taking them as a particular example, there is no differentiation made between the extravagant local authority and the good local authority.
In certain local authorities we are short of police, short of teachers, short of nurses and every kind of employee. We are frantically giving additional incentives by increased salaries to police, teachers, and nurses to encourage people to come into those services. That in itself will mean a burden on local authorities. Yet, at the same time, we are saying that we may operate a regulator in order that they shall economise in the use of employees. I agree with what many hon. Members on both sides of the House have said, that this regulator has not been looked at adequately. I doubt very much whether any of the Treasury Ministers have got down to the task of finding out how such a thing would operate.
Another thing which I do not think has been mentioned in the debate is the

question of part-time workers. In the present state of full employment in many parts of the country—although not in all parts of the count ry—part—time workers have been encouraged. It will be a great burden on industries which employ part-time workers if they have to meet this additional charge. I hope that my right hon. and learned Friend will not have to operate this regulator but that he will have time between now and the next Finance Bill to think out a better and more practical scheme.
I have noted with great interest that hon. Members representing Northern Ireland have managed to extract Northern Ireland from this provision. I think it extraordinarily unfair that my part of the country, to whose unemployment problems all members of the Government pay lip-service, is not to be treated in the same favourable way as Northern Ireland. I shall not pursue that subject, Mr. Speaker, because I suppose that. Northern Ireland having disappeared from the provisions of the Finance Bill, it would not be in order to refer to Northern Ireland, but I want to watch the interests of my part of the world which I do not think has been fairly treated.
I noticed that in his opening speech this afternoon my right hon. and learned Friend referred to the fact that Income Tax reliefs in respect of increased National Insurance contributions formed an expensive item. The amount is about £15 million. By a Question in the House I tried to get my right hon. and learned Friend to give me an answer about the difference in cost to someone who gets Income Tax relief in respect of a retirement pension and someone who does not get such relief. Needless to say, my right hon. and learned Friend transferred the Question to the Minister of National Insurance, although the object in putting the question was directly related to this additional burden of £15 million on the taxpayer. This matter does not apply only to those who are paying increased National Insurance contributions for retirement pensions. It applies also to National Health Service contributions and Industrial Injuries contributions. Those on lower incomes are paying more for these benefits than those on higher incomes. I take great exception to that.
When my Question was transferred I was surprised to find that the Minister of National Insurance could not read. I thought my Question was quite clear, but he failed to give me an answer. I have not the slightest reason for supposeing that the Ministry ever attempted to work out what the answer was. It would not be convenient if all the figures were presented to the country. Therefore, I challenge my right hon. and learned Friend. Ministers have been able to assess the loss to the Treasury caused by this Income Tax relief, which amounts to £15 million, so—unless it is a completely "phoney" figures, which I do not for a moment believe—they must have some idea of how it works out in an individual case.
I suggest as a challenge that my right hon. and learned Friend should give me a direct figure, supposing that the insurance contribution and income Tax reliefs remain the same as they are today. If I happen to sit in this House for a few more Finance Bills I shall not hold it up against him if anything goes wrong with the calculation, but I want the country to be told what is the difference in the actual amount of money which is paid by those who get the benefit of £18 a year Income Tax relief in respect of their National Insurance contributions and those who do not. I am pretty certain, though I am not much of a mathematician myself, that the country will be surprised if the figures cannot be produced. I hope that the Financial Secretary, if he is to wind up this debate, will meet the challenge and let me have the result.
I want to comment on the reply given by the Minister of Pensions and National Insurance. He said that it was not possible to give the cost of the contributions after allowing the Income Tax relief as the amount of such relief must vary from case to case. Of course, it must vary from case to case, but, at the same time, my right hon. and learned Friend could give an estimate of how much it would cost the Treasury. There must be some means of assessing the basis on which he arrives at his figure. I confidently look forward to receiving it, even if it has to be presented in a table, so that I can go on campaigning in the country once more in support of those living on small fixed incomes and a lower standard of living

than the people who get Income Tax and Surtax reliefs.
I have one other point and that is this. [HON. MEMBERS: "Oh."] I have listened to everyone's speech today, and I wish to make my point. If hon. and right hon. Gentlemen opposite groan, may I say that I could talk for a couple of hours without ceasing. I am not in the least likely to do so, because I want to make only one other point.
My right hon. and learned Friend referred to two concessions for which we are very grateful—relief to parsonages and relief to victims of Nazi aggression. He omitted to say that there was one other little relief which was also included in the Budget. I know very well why he did not. His psychology operates for some things but not for everything. Presumably, he did not think that it was a good idea to mention the fact that there has been a slight increase—I think it is £10—in the rate of dependants' allowances. That is one tiny little relief and we have never had any explanation why that relief was selected. I am very grateful for it, but I would point out that a great many people have no relatives on whom they can depend. These people are struggling, and not a single one of them is getting a crumb out of the Finance Bill.

Mr. Speaker: The hon. Lady is complaining about something that is not in the Bill and which she thinks ought to be in it, and that must be out of order.

Dame Irene Ward: I was talking about the crumb that is in the Bill. The crumb in the Bill is far too small a crumb and it might help one or two people if it could be extended into a cake. Therefore, I urge my right hon. and learned Friend to give us a few more crumbs.
I end with this one appeal. I hope that the Financial Secretary will say something about this on behalf of his right hon. and learned Friend, because his right hon. and learned Friend seems to have given all sorts of pledges to all sorts of people with regard to big business. I am slightly tired of big business. I can never get any support for the big business that I am interested in—shipbuilding, shipping, dry docks, fishing and all the rest of it. Most of the concessions seem to go to horticulturists and a


few other people like that. All that I want is an assurance from the Financial Secretary that all these allowances, which are so inadequately and badly phrased, and badly thought out, will be looked at again.
A rumour has reached me that my right hon. and learned Friend has started an inquiry, but I should feel a little more satisfied if I thought that the whole of the inquiry was not being carried out by the Treasury. I think that the Treasury lives in a world of its own. I want to know whether during the course of the inquiry—

Mr. Deputy-Speaker (Sir Gordon Touche): This does not come within the Third Reading of the Bill.

Dame Irene Ward: I agree, Mr. Deputy-Speaker, but a lot of the speeches of hon. Members have been very wide while you have been out of the Chair.

Mr. Deputy-Speaker: The hon. Lady will no doubt set an example.

Dame Irene Ward: I shall set an example because I am coming to my peroration. It would be a pity to destroy the form of that peroration, Mr. Deputy-Speaker, and I hope that you will allow me to say that I hope that my right hon. and learned Friend and my hon. Friend the Financial Secretary will be kind enough to ask advice from people who have had experience of life below the level of Treasury life. Treasury life is too much removed from what goes on in the world. A great many people would be only too delighted to give the benefit of their advice which in the next Finance Bill would, I am sure, result in a much fairer and better future for those who live on small fixed incomes. I have not yet made up my mind whether I shall support my right hon. and learned Friend in the Lobby tonight. It all depends on what the Financial Secretary says about this matter when he replies.

7.49 p.m.

Mr. Douglas Houghton: We come to the closing speeches in the long debates which we have had on this Bill. It seems a long time since Budget day on 17th April, and it probably seems longer to the Chancellor than it does to the rest of us in the House. The right

hon. and learned Gentleman will be relieved that the hon. Lady the Member for Tynemouth (Dame Irene Ward) did not carry out her threat to go on scolding him for another couple of hours. Her speech was, as usual, highly critical of the Government, and it is one of the extraordinary things about the debates on this Bill that so little support has been given to the Government. Most hon. Members who have spoken from the other side of the House today have been critical of one or other of the proposals in this Bill.
I am sure that the House was glad to hear the intervention of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who told us that this was his twenty-first Budget anniversary. We shall agree that throughout that time he has lost nothing of his rigid integrity and nothing of his eighteenth century ideas on economics and finance. He adopted an attitude of lofty disdain for our proceedings on the Finance Bill; with well-starched eloquence he almost said that we were wasting our time on the trivia of financial business and that much which we discussed had nothing to do with the great events of the nation and the world.
The noble Lord referred rather contemptuously to the glow of pride which we all feel when we obtain concessions from the Chancellor during the Budget debates. But we can rarely get big concessions; we have to be pleased with small ones. Moreover, we must bear in mind that even small concessions matter to a lot of people, and it would be a mistake to regard the whole of the debates on the Bill as confined to the broad sweep of economic needs and purposes. The Bill has another purpose. It deals with taxation in the round and it deals with taxation in the smallest detail. Some of the concessions which we sought earlier in the debates, though small, would have been very welcome indeed to considerable sections of the community.
The noble Lord made scathing references to the volume of Government expenditure and roundly condemned the Government for continuing expenditure at its present level. But he and other hon. Members who constantly refer to the present level of Government expenditure rarely say anything about the weight


of defence expenditure and the weight of expenditure on education and social welfare, because they know that this is built into our present national and social requirements. The one which we should like to get rid of, and which we hope soon to get rid of, is the crippling burden of defence expenditure. Once we have done that, it may be possible not only to reduce taxation but to extend our social services.
The hon. Member for Louth (Sir C. Osborne), who had a very rough time this afternoon with his hon. Friends, certainly made a very pessimistic appraisal of our economic position, but if to be pessimistic is an error, to be unduly complacent is a more grievous error. I think some hon. Members opposite were more disturbed about the contrast between the Government's statements at the time of the election and the hon. Member's speech than they were disapproving of the contents of the speech itself. But who has induced this feeling of comfort, ease, and well-being? The Prime Minister only the other day said that we were more prosperous than we had ever been. The Prime Minister seems to make the sweet music and to leave the Chancellor to strike the jarring notes. I think the hon. Member for Louth was right to strip the complacency off the political scene and to warn the country that we face difficult and possibly perilous times. It is against that background that we have to judge the Bill.
The Chancellor's worry, as expressed several times, is in the present trend in the economy—the slowing down of the rate of advance. He is right in saying that we cannot continue to prosper on stagnation. Britain is in trade, and that is what we must remember. Our living standards are bound to be in jeopardy unless we can find some way to make a sustained and continuous advance. On these benches, we are of the opinion that the Bill does not facilitate this continuous advance which is so necessary to our rising prosperity.
The Bill will certainly give the Chancellor all the revenue which he is likely to need this year—much more than enough. He is budgeting for £500 million surplus above the line, and that will be adequate, he thinks, to take some of the inflation out of the economy. He is also providing to meet most of the loans

to nationalised industries and local authorities without borrowing. The Chancellor says that he still wants savings, but he has made his Budgetary requirements almost independent of them.
Over and above that, the Chancellor has provided in Clauses 9 and 30 for the two regulators which, if used, will bring additional revenue amounting to £400 million a year to the Exchequer, extracted from the coffers of industry and the pockets of the people. Presumably that is the basis upon which he justifies his description of this as a counter-inflationary Bill.
Apart from the major proposals in the Bill, to which I will come in a few moments, there are one or two Clauses which merit comment. The hon. Member for Kidderminster (Mr. Nabarro) referred to Clauses 23–26, which deal with expenses charged against Income Tax on a fairly narrow front. They deal only with the amount to be charged for the use of motor cars. The hon. Member for Kidderminster referred to the comments of Lord Evershed in a case in the Court of Appeal recently. There is no doubt that before long the Chancellor must consider what he can do to clear up the present mess of expenses chargeable against Income Tax under both Schedule E and Schedule D.
Some time soon, I am sure, many hon. Members opposite will be glad to hear from the hon. Member for Kidderminster how he managed to get his subscription to the Carlton Club allowed as a deduction from his taxable income. Either he charged it against his Parliamentary salary as wholly, necessarily and exclusively incurred in the performance of his office, or he charged it against his assessment of business profits as wholly laid out for the purpose of the trade. One day we should like to know which it is. Does he do all his business in the Carlton Club? He must not be surprised if his claim to charge this subscription as a tax deduction is subject to rather closer scrutiny in the future than in the past, although I agree with him that the problem of expenses needs attention. But I do not believe that the solution to the problem of expenses under Schedule E is to bring them into line with Schedule D. In my opinion, if we did that the sluice gates would be wide


open, and the hon. Member's speech is proof of that.

Mr. Nabarro: I made no recommendations one way or the other. It would be inappropriate to do so on Third Reading of the Finance Bill. I brought out the unfairness of the situation. I was not boasting about the simple fact that the Inland Revenue have for many years allowed me to charge my Carlton Club subscription against income. They do so on grounds that I must have good political conversation—and that is the best place to have it. If my right hon. and learned Friend decides to change the law, I shall warmly support him. I quoted my own case against myself in order to illustrate a totally ridiculous situation. If I can charge my Carlton Club subscription, why cannot any trade union member charge his trade union contribution?

Mr. Loughlin: Because we do not do it. We are fair.

Mr. Houghton: I doubt very much whether a search for good political conversation justifies a deduction from Income Tax either on the ground of necessity or on the ground that the expense is wholly laid out for the purpose of trade. However that may be, I do not want to digress on this matter any further, because the Bill deals only with one aspect of the wide range of problems connected with expenses. If the Chancellor thinks that my advice is of any value, it is that much rougher justice would be the best solution and would remove much of the disputation and argument from the relations between the taxpayer and the Revenue.
Clauses 28 and 29 are both welcome as safeguards to the Revenue. The main topics of debate today, however, and on earlier occasions have been the two regulators in Clauses 9 and 30 and the Surtax reliefs. I am sure that the House appreciates the dilemma which confronted the Chancellor in his desire to widen the range of his weapons to deal with difficulties with sterling or balance of payments or other evils which seem continually to beset us. He must realise that the two regulators are just as blunt in their operation as the ones he already has—namely, the Bank Rate, the credit squeeze and hire-purchase restrictions.

The difference between them is probably that the two regulators will hit everybody, whereas the others are restrictive in their effect. Clauses 9 and 30 give the Chancellor a double-barrelled blunderbuss with which to pepper everybody with economic grape-shot. That is really what the Chancellor has got, and everybody will feel the effect of them if they come into operation.
If we are looking at this in terms of our future advance economically, I suggest that these, like the other measures which the Chancellor has to curb both consumption and wage increases, cannot be effective for very long. There is no doubt that Clause 9 is intended to curb consumption and Clause 30 is intended to discourage employers from giving wage increases to pay for higher prices. Clause 30 has long since ceased to pretend to be a regulator of the use of labour. It is purely and simply a revenue tax on the employer to disable him from conceding wage increases which are almost certain to follow higher prices following on Clause 9.
I warn the right hon. and learned Gentleman that the two regulators can be effective for only a short time until the tide of demand overtakes them. They are not a remedy for a stagnant economy. Curbing home demand does not of itself facilitate exports, unless there are goods to be exported which our overseas customers will buy which otherwise would be absorbed into the home market. Is there any evidence of failure to meet export demands at present owing to excessive home consumption? I doubt very much whether there is. So the regulators are a negative weapon. They are not a positive contribution to economic advance. They are put in the Bill in a spirit of pessimism and not in a spirit of hope for the future.
I come, finally, to the most grievous blemish in the Bill from our point of view, namely, the Surtax reliefs. It is these proposals which have decided my right hon. and hon. Friends to divide the House on Third Reading. We would have found the other proposals in the Bill tolerable enough to enable the Third Reading to go by without a Division, but we are still not able to swallow the Surtax reliefs, because we have not yet had any real justification for them. The Chancellor says that he believes that


there is substantial disincentive because of the levels of taxation at present on higher earnings, but he must have some evidence for that contention if he is to base his decision upon it.
The Chancellor again gave us the league tables. I have never been able to understand what relevance the level of taxation of earned income in Western Germany, the United States of America and Italy has to the level of taxation in this country. Our business executives and directors are not in direct competition personally with their opposite numbers in other countries. They are not emigrating to Western Germany, the United States of America or Italy in numbers that would lend colour to the suggestion that our executives are at some disadvantage compared with their opposite numbers elsewhere. To examine this proposition more carefully we must look at the level of social insurance payments, the level of welfare services, and the provision of education, in this country as compared, for example, with the United States. It is a completely false comparison which the Chancellor and the Financial Secretary keep on making in part justification of the reductions in Surtax.

Mr. Diamond: As my hon. Friend has referred to the challenge the Financial Secretary made in a speech of mine two days ago, would he agree that it is not right to compare American taxes with ours without also taking into account the capital gains tax?

Mr. Houghton: Yes. We all appreciate that there are such differences in all sorts of ways as to invalidate the Chancellor's comparison. What the Chancellor is presumably doing is to put to the country and to the House the argument that, unless the Surtax payer is relieved now, the economy will not expand. That is a very bold proposition to put to the House and to the country. The right hon. and learned Gentleman is backing his judgment with £83 million of revenue and hedging the bet by putting 2½ per cent. on Profits Tax. His judgment rests on the flimsy foundations I have mentioned.
Delving into the explanations of businessmen on this matter, we find some very interesting theories. One put out by the National Union of Manufacturers is that with the present levels of taxation

salaries of the top people have to be inflated out of all proportion in order to give them a net income after taxation which they feel is adequate reward for their services. We are now entitled to ask industry this question: if salaries have been inflated in the past because of the high level of Surtax, are they to be reduced now that Surtax is coming down? That is a natural corollary of that theory. If in the past businessmen have had to take much more in terms of gross remuneration than the job is worth in order to take account of the ravages of taxation, now that Surtax is being reduced by anything up to £1,250 a year for people on £10,000 a year, the level of remuneration for Britain's top brass can be reconsidered in the light of these changes. We have not been convinced that there is justification for these reliefs, even if they are postponed for twelve months. In fact, I think that there is probably more objection to a promissory note for Surtax payers on the national economy than there is to giving it to them now. This promissory note will be a serious drain on our resources in several years from now.
Looking at the substantial relief that has been given in this direction and also at the impositions that are being made on the great masses of the public and the threat to extract from their purses what little purchasing power remains to them after they have paid for their essentials of life, my hon. Friends and I feel that we cannot assent even to the Third Reading of this Bill.

8.12 p.m.

The Financial Secretary to the Treasury (Sir Edward Boyle): The House may be relieved to know that I have to sit on this Bench for the business which follows this Bill and for the business after that, so that I have as strong an interest as any hon. Member in the proceedings of this Bill being carried to an early conclusion. I hope, therefore, that the House will forgive me if I am briefer than is customary on this occasion.
I do not want to comment in detail on many of the speeches that have been made today although I must say a word about the speech made by my hon. Friend the Member for Louth (Sir C. Osborne). I think that my hon. Friend was too determined to be gloomy about our present situation. Among the many


statistics and figures which he quoted, there is one—and I will not develop this point but merely refer to it—which would urge my hon. Friend not to forget: during the last two years we have seen a substantial increase in the proportion of our national income going to investment. In those circumstances, it is inevitable that we should have short-term difficulties with our balance of payments and, furthermore, a fairly rapid upsurge in consumer spending as well. Therefore, I advise my hon. Friend to look at all the figures and perhaps to realise that not every aspect is quite as gloomy as he suggested.
One feature of all these debates since April has been that not many hon. Members on either side of the House have qustioned my right hon. and learned Friend's Budget judgment for this year. There have been few criticisms of the Chancellor's prospective revenue surplus or of the small overall borrowing requirement. I remind hon. Members of what the Chancellor said this afternoon; that there is no doubt that the large prospective surplus and the large prospective increase in direct taxation will exert a definite disinflationary tendency. The Chancellor pointed out that the yield of direct taxation went up by over £90 million in the first quarter of the current financial year as compared with the first quarter of the last financial year, and I have no doubt that this surplus will make an increasing impact as the year goes on.
A point which has been very much in the minds of hon. Members is the decision of the Chancellor to take powers for his two regulators. I do not see how there can be any doubt that, in principle, these regulators are needed. We all realise the need to have a balance in our economy between our productive resources and the demands made on them, and we also realise that a mainly free enterprise economy does not automatically steer itself into equilibrium. No hon. Member on either side has ever pretended that it did.
Furthermore, hon. Members should realise that there is no painless way of achieving this equilibrium. We must curtail or limit purchasing power, and we have seen, perhaps more clearly during the last few years, the limits of monetary policy. I do not agree with

all the criticism that has been made by hon. Gentlemen opposite of monetary policy, but I appreciate that perhaps, by experience, we have seen its limits. We have seen the operation of hire-purchase controls and how they particularly affect a small section of the economy. Above all, it is common ground in the House that capital investment is extremely important to our future, both from the point of view of exports and from the point of view of strengthening our capacity to increase living standards at home. This demonstrates the need for flexible instruments which will influence consumer spending.
I do not wish to weary the House by making long quotations or giving a great number of figures, but one sensible passage is to be found in a memorandum of evidence submitted to the Radcliffe Committee, an interesting and important memorandum submitted by three economists, Messrs. Little, Neild and Ross. It states:
…Any Government which takes action to reduce the level of consumers' demand is liable to be unpopular, and its measures are bound to be controversial. But the public—and the Government—must learn to accept that variations in taxation—upwards and downwards—are a necessary and important element in the control of economic fluctuations…
Those are wise words and I think that the Chancellor's Budget, with his proposals for these regulators, shows clearly that my right hon. and learned Friend sees the strength of that argument.
I do not propose to speak at length tonight about either the first or the second of these regulators. I think that there has been fairly widespread agreement with regard to the first. To those hon. Members who think that any proposal for ever putting up indirect taxation must be wrong, I would say that, first of all, we must realise that the problem of excess demand is not identical with the problem of rising prices. So long as we have excess demand in our economy, then not merely wage costs will rise, but we will get into difficulties with our balance of payments and difficulties over excessive demands for labour as well.
Secondly, I thought that the hon. Member for Grimsby (Mr. Crosland), in an interesting speech on this Clause, made a valuable point when he reminded the House of how important it


was to have regulators that acted quickly. He pointed out that the whole purpose of having such a regulator was its ability to bite quickly, and the hon. Gentleman was justified in questioning whether a direct tax regulator could bite as quickly as could an indirect tax regulator.
Thirdly, whatever anyone may say, my view is that most of us are more ready to undertake spending commitments when taxation is falling than when it is rising. These regulators, if put into practice, will have a fairly sharp effect on demand.
On the constitutional point that has been raised, of course we must have a full Ways and Means procedure and a Finance Bill going through all its stages when we bring in new items of taxation or when we introduce measures which affect substantially the distribution of the national income. None of us complains when we have to debate them for a good many hours, just as I make no complaint about the long debates we had about earlier Bills which affected the distribution of the national income. I urge hon. Members to realise that it is wrong that the Chancellor should not have some flexible means at his disposal of influencing the general level of purchasing power in such a way as not substantially to influence the distribution of the national income.
With regard to Surtax, having listened to most of the arguments throughout these debates I am sure that I speak for all of my hon. and right hon. Friends in saying that we are still impenitent about these proposals, and that it is absolutely right that they should have been included in the Bill. A great many hon. Members have talked about these proposals and their impact on wage restraint. That argument, in so far as it has any validity, could have been used at any time during the last ten years. It is true, in any year since the war, that if wages had risen faster than the value of our products the net effect must be a slower rate of economic growth and a lower rate of economic prosperity than we could otherwise achieve.
It is absolutely untrue to say—as hon. Gentlemen opposite have said—that the Surtax reliefs are being paid for out of Health Service charges or contributions.

They are, in fact, being financed overwhelmingly out of Profits Tax, the increased Profits Tax imposed last year and the further increase this year. I do not believe, even with these increases in Profits Tax, that our rate of industrial taxation is seriously out of line with the rates of industrial taxation of our chief business competitors. Hon. Members should remember that against these increases in Profits Tax business has gained from the 9d. reduction in the standard rate in 1959.
At the same time, I believe, for reasons that have been explained often in these debates, and before this Bill, that the rate of personal taxation of executives was out of line with the rates of very many of our chief competitors. I shall not quote again those figures that I have quoted, and so have others of my hon. Friends, but I think that they proved their point; that undoubtedly there was a range of taxation in which our tax rates were seriously out of line.
In answer to hon. Members opposite, I should be prepared to justify these proposals both on grounds of incentive and of social justice. On the one hand, I just do not believe that it can be maintained that our high rates of taxation have no effect on the competitive edge of British industry abroad. Equally, I hold to what I said in the Budget debate—that social justice consists of treating everyone fairly in whatever position of society he may find himself, and there is nothing in the least degree just about penal rates of taxation on people of extra ability.
Finally, I absolutely reject the idea that this is in any way a "class" Budget", or that my right hon. Friends have followed a "class" policy. When we look at what has been achieved since 1951 in the way of tax allowances, the increase in the single person's allowance, the increase in the married man's allowance; when we look at the reduction in the standard and reduced rates, and at what we have done for those on small fixed incomes, and when we remember that we now have three or four times as many families with incomes of between £500 and £1,000 a year, I do not believe that idea for one moment.
It is because I believe that we have, over the years, followed a national policy, and that this is a Budget that


can be justified on the widest lines, that I ask my hon. and right hon. Friends to approve this Bill this evening.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 293, Noes 206.

Division No. 244.]
AYES
[8.22 p.m.


Aitken, W. T.
Emery, Peter
Lancaster, Col. C. G.


Allan, Robert (Paddington, S.)
Errington, Sir Eric
Langford-Holt, J.


Allason, James
Erroll, Rt. Hon. F. J.
Leather, E. H.C.


Arbuthnot, John
Farey-Jones, F. W.
Leavey, J. A.


Ashton, Sir Hubert
Farr, John
Leburn, Gilmour


Atkins, Humphrey
Finlay, Graeme
Legge-Bourke, Sir Harry


Balniel, Lord
Fisher, Nigel
Lewis, Kenneth (Rutland)


Barber, Anthony
Fletcher-Cooke, Charles
Lilley, F. J. P.


Barlow, Sir John
Foster, John
Lindsay, Martin


Barter, John
Fraser, Hn. Hugh (Stafford &amp; Stone)
Linstead, Sir Hugh


Batsford, Brian
Fraser, Ian (Plymouth, Sutton)
Litchfield, Capt. John


Baxter, Sir Beverley (Southgate)
Freeth, Denzil
Lloyd, Rt. Hn. Geoffrey(Sut'nC'crfield)


Beamish, Col. Sir Tufton
Galbraith, Hon. T. G. D.
Lloyd, Rt. Hon. Selwyn (Wirral)


Bell, Ronald
Gammans, Lady
Longbottom, Charles


Bennett, F. M. (Torquay)
Gardner, Edward
Langden, Gilbert


Berkeley, Humphry
Gibson-Watt, David
Loveys, Walter H.


Bevins, Rt. Hon. Reginald
Glover, Sir Douglas
Lucas, Sir Jocelyn


Bidgood, John C.
Glyn, Dr. Alan (Clapham)
Lucas-Tooth, Sir Hugh


Biggs-Davison, John
Gtyn, Sir Richard (Dorset, N.)
McAdden, Stephen


Bingham, R. M.
Godber, J. B.
McLaughlin, Mrs. Patricia


Bishop, F. P.
Goodhew, Victor
Maclay, Rt. Hon. John


Black, Sir Cyril
Gower, Raymond
Maclean, SirFitzroy(Bute&amp;N.Ayrs.)


Bossom, Clive
Grant, Rt. Hon. William
McLean, Nell (Inverness)


Bourne-Arton, A.
Green, Alan
MacLeod, John (Ross &amp; Cromarty)


Box, Donald
Gresham Cooke, R.
McMaster, Stanley R.


Boyd-Carpenter, Rt. Hon. John
Grimston, Sir Robert
Macmillan, Rt. Hn. Harold(Bromtey)


Boyle, Sir Edward
Grosvenor, Lt.-Col. R. G.
Macmillan, Maurice (Halifax)


Braine, Bernard
Gurden, Harold
Macpherson, Niall (Dumfries)


Brawls, John
Hall, John (Wycombe)
Maddan, Martin


Bromley-Davenport,Lt.-Col.Sir Walter
Hamilton, Michael (Wellingborough)
Maginnis, John E.


Brooke, Rt. Hon. Henry
Harris, Frederic (Croydon, N.W.)
Maltland, Sir John


Brooman-White, R.
Harris, Reader (Heston)
Markham, Major Sir Frank


Brown, Alan (Tottenham)
Harrison, Brian (Maldon)
Marlowe, Anthony


Browne, Percy (Torrington)
Harvey, Sir Arthur Vere (Macclesf'd)
Marples, Rt. Hon. Ernest


Bryan, Paul
Harvey, John (Walthamstow, E.)
Marshall, Douglas


Buck, Antony
Harvie Anderson, Miss
Marten, Neil


Bullard, Denye
Hastings, Stephen
Matthews, Gordon (Meriden)


Bullus, Wing Commander Eric
Hay, John
Maudling, Rt. Hon. Reginald


Burden, F. A.
Heald, Rt. Hon. Sir Lionel
Mawby, Ray


Butler, Rt. Hn. R. A. (Saffron Walden)
Henderson, John (Cathcart)
Maxwell-Hyslop, R. J.


Campbell, Gordon (Moray &amp; Nairn)
Henderson-Stewart, Sir James
Maydon, Lt.-Cmdr. S. L. C.


Carr, Compton (Barons Court)
Hendry, Forbes
Mills, Stratton


Carr, Robert (Mitcham)
Hicks Beach, Maj. W.
Montgomery, Fergus


Cary, Sir Robert
Hiley, Joseph
More, Jasper (Ludlow)


Channon, H. P. G.
Hill, Dr. Rt. Hon. Charles (Luton)
Morgan, William


Chataway, Christopher
Hill, J. E. B. (S. Norfolk)
Morrison, John


Chichester-Clark, R.
Hinchingbrooke, Viscount
Mott-Radclyffe, Sir Charles


Clark, Henry (Antrim, N.)
Hirst, Geoffrey
Nabarro, Gerald


Clark, William (Nottingham, S.)
Hobson, John
Nicholls, Sir Harmar


Clarke, Brig. Terence (Portsmth, W.)
Hocking, Philip N.
Noble, Michael


Cleaver, Leonard
Holland, Philip
Nugent, Sir Richard


Cole, Norman
Hollingworth, John
Oakshott, Sir Hendrie


Cooper, A. E.
Hope, Rt. Hon. Lord John
Orr-Ewing, C. Ian


Cordeaux, Lt.-Col. J. K.
Hopkins, Alan
Osborn, John (Hallam)


Cordle, John
Hornby, R. P.
Osborne, Sir Cyril (Louth)


Corfield, F. V.
Hornsby-Smith, Rt. Hon. Patricia
Page, John (Harrow, West)


Costain, A. P.
Howard, John (Southampton, Test)
Page, Graham (Crosby)


Courtney, Cdr. Anthony
Hughes Hallett, Vice-Admiral John
Pannell, Norman (Kirkdale)


Craddock, Sir Beresford
Hughes-Young, Michael
Partridge, E.


Critchley, Julian
Hulbert, Sir Norman
Pearson, Frank (Clitheroe)


Crowder, F. P.
Hutchison, Michael Clark
Peel, John


Cunningham, Knox
Iremonger, T. L.
Perclval, Ian


Curran, Charles
Irvine, Bryant Godman (Rye)
Peyton, John


Currie, G. B. H.
Jackson, John
Pickthorn, Sir Kenneth


Dalkeith, Earl of
James, David
Pitman, sir James


Dance, James
Jenkins, Robert (Dulwich)
Pitt, Miss Edith


d'Avigdor-Goldsmid, Sir Henry
Johnson, Dr. Donald (Carlisle)
Pott, Percivall


Deedes, W. F.
Johnson, Eric (Blackley)
Powell, Rt. Hon. J. Enoch


de Ferranti, Basil
Johnson Smith, Geoffrey
Price, David (Eastleigh)


Donaldson, Cmdr. C. E. M.
Jones, Rt. Hn. Aubrey (Hall Green)
Price, H. A. (Lewisham, W.)


Doughty, Charles
Joseph, Sir Keith
Prior, J. M. L.


Drayson, G. B.
Kerans, Cdr. J. S.
Prior-Palmer, Brig. Sir Otho


Duncan, Sir James
Kerby, Capt. Henry
Profumo, Rt. Hon. John


Eden, John
Kerr, Sir Hamilton
Proudfoot, Wilfred


Elliot, Capt. Walter (Carshalton)
Kitson, Timothy
Pym, Francis


Elliott, R. W.(Nwcstle-upon-Tyne,N.)
Lagden, Godfrey
Quennell, Miss J. M.




Redmayne Rt. Hon, Martin
Stevens, Geoffrey
Vosper, Rt, Hon. Dennis


Rees-Davies, W. R.
Stoddart-Scott, Col. Sir Malcolm
Wakefield, Sir Wavell (St. M'lebone)


Ronton, David
Storey, Sir Samuel
Walder, David


Ridley, Hon. Nicholas
Studholme, Sir Henry
Walker, Peter


Ridsdale, Julian
Summers, Sir Spencer (Aylesbury)
Walker-Smith, Rt. Hon. Sir Derek


Rippon, Geoffrey
Sumner, Donald (Orpington)
Wall, Patrick


Roberts, Sir Peter (Heeley)
Talbot, John E.
Watkinson, Rt. Hon. Harold


Robinson, Sir Roland (Blackpool, S.)
Tapsell, Peter
Webster, David


Robson Brown, Sir William
Taylor, Sir Charles (Eastbourne)
Wells, John (Maidstone)


Rodgers, John (Sevenoaks)
Taylor, Edwin (Bolton, E.)
Whitelaw, William


Roots, William
Teeling, William
Williams, Paul (Sunderland, S.)


Ropner, Col. Sir Leonard
Temple, John M.
Wills, Sir Gerald (Bridgwater)


Royle, Anthony (Richmond, Surrey)
Thatcher, Mrs. Margaret
Wilson, Geoffrey (Truro)


Russell, Ronald
Thomas, Leslie (Canterbury)
Wise, A. R.


Scott-Hopkins, James
Thomas, Peter (Conway)
Wood, Rt. Hon. Richard


Seymour, Leslie
Thompson, Richard (Croydon, S.)
Woodhouse, C. M.


Shaw, M.
Thornton-Kemsley, Sir Colin
Woodnutt, Mark


Shepherd, William
Turner, Colin
Woollam, John


Simon, Rt, Hon. Sir Jocelyn
Turton, Rt. Hon. R. H.
Worsley, Marcus


Skeet, T. H. H.
van Straubenzee, W. R.



Smith, Dudley (Br&quot;ntf'rd &amp; Chiswick)
Vane, W. M. F.
TELLERS FOR THE AYES:


Spearman, Sir Alexander
Vaughan-Morgan, Rt. Hon. Sir John
Mr. E. Wakefield and


Speir, Robert
Vickers, Miss Joan
Sir H. Harrison.


NOES


Abse, Leo
Gunter, Ray
Mellish, R. J.


Ainsley, William
Hall, Rt. Hn. Glenvil (Colne Valley)
Mendelson, J. J.


Albu, Austen
Hamilton, William (West Fife)
Milne, Edward J.


Allen, Scholefield (Crewe)
Hannan, William
Mitchison, G. R.


Bacon, Miss Alice
Hart, Mrs. Judith
Monslow, Walter


Baird, John
Hayman, F. H.
Moody, A. S.


Bence, Cyril
Healey, Denis
Morris, John


Benson, Sir George
Hill, J. (Midlothian)
Mort, D. L.


Blyton, William
Hilton, A. V.
Moyle, Arthur


Boardman, H.
Holman, Percy
Mulley, Frederick


Bowden, Herbert, w. (Leics, S.W.)
Houghton, Douglas
Noel-Baker, Rt. Hn. Philip(Derby, S.)


Bowles, Frank
Howell, Charles A. (Perry Barr)
Oliver, G. H.


Boyden, James
Howell, Denis (Small Heath)
Oram, A. E.


Brockway, A. Fenner
Hoy, James H.
Oswald, Thomas


Broughton, Dr. A. D. D.
Hughes, Emrys (S. Ayrshire)
Owen, Will


Brown, Rt. Hon. George (Belper)
Hughes, Hector (Aberdeen, N.)
Padley, W. E.


Butler, Herbert (Hackney, C.)
Hunter, A. E.
Paget, R. T.


Butler, Mrs. Joyce (Wood Green)
Hynd, H. (Accrington)
Pannell, Charles (Leeds, W.)


Castle, Mrs. Barbara
Irvine, A. J. (Edge Hill)
Parker, John


Chapman, Donald
Irving, Sydney (Dartford)
Parkin, B. T.


Chetwynd, George
Janner, Sir Barnett
Pavitt, Laurence


Cliffe, Michael
Jay, Rt. Hon. Douglas
Peart, Frederick


Collick, Percy
Jeger, George
Pentland, Norman


Corbet, Mrs. Freda
Jenkins, Roy (Stechford)
Plummer, Sir Leslie


Craddock, George (Bradford, S.)
Johnson, Carol (Lewisham, S.)
Prentice, R. E.


Crosland, Anthony
Jones, Rt. Hn. A. Creech(Wakefield)
Price, J. T. (Westhoughton)


Crossman, R. H. S.
Jones, Dan (Burnley)
Probert, Arthur


Cullen, Mrs. Alice
Jones, Elwyn (West Ham, S.)
Proctor, W. T.


Darling, George
Jones, Jack (Rotherham)
Pursey, Cmdr. Harry


Davies, G. Elfed (Rhondda, E.)
Jones, J. Idwal (Wrexham)
Randall, Harry


Davies, Harold (Leek)
Jones, T. W. (Merioneth)
Rankin, John


Davies, Ifor (Gower)
Kelley, Richard
Redhead, E. C.


Deer, George
Kenyon, Clifford
Reid, William


Delargy, Hugh
Key, Rt. Hon. C. W.
Reynolds, G. W.


Diamond, John
King, Dr. Horace
Rhodes, H.


Dodds, Norman
Lawson, George
Roberts, Albert (Normanton)


Donnelly, Desmond
Ledger, Ron
Robertson, John (Paisley)


Driberg, Tom
Lee, Frederick (Newton)
Robinson, Kenneth (St. Pancras, N.)


Dugdale, Rt. Hon, John
Lee, Miss Jennie (Cannock)
Roes, William


Ede, Rt. Hon. C.
Lever, Harold (Cheetham)
Royle, Charles (Salford, West)


Edelman, Maurice
Lever, L. M. (Ardwick)
Short, Edward


Edwards, Rt. Hon. Ness (Caerphilly)
Lewis, Arthur (West Ham, N.)
Silverman, Julius (Aston)


Edwards, Walter (Stepney)
Lipton, Marcus
Silverman, Sydney (Nelson)


Evans, Albert
Loughlin, Charles
Skeffington, Arthur


Fitch, Alan
Mabon, Dr. J. Dickson
Slater, Mrs. Harriet (Stoke, N.)


Fletcher, Eric
McCann, John
Slater, Joseph (Sedgefield)


Foot, Michael (Ebbw Vale)
MacColl, James
Small, William


Forman, J. C.
Mclnnes, James
Smith, Ellis (Stoke, S.)


Fraser, Thomas (Hamilton)
McKay, John (Wallsend)
Snow, Julian


Gaitskell, Rt. Hon. Hugh
Mackie, John (Enfield, East)
Sorensen, R. W.


Galpern, Sir Myer
McLeavy, Frank
Soskice, Rt. Hon. Sir Frank


Ginsburg, David
MacPherson, Malcolm (Stirling)
Spriggs, Leslie


Gordon Walker, Rt. Hon, P. C.
Mallalieu, E. L. (Brigg)
Steele, Thomas


Gourlay, Harry
Mallalieu, J. P. W.(Huddersfield, E.)
Stewart, Michael (Fulham)


Greenwood, Anthony
Manuel, A.C.
Stonehouse, John


Grey, Charles
Mapp, Charles
Stones, William


Griffiths, David (Rother Valley)
Marquand, Rt. Hon. H. A.
Strauss, Rt. Hon. G. R. (Vauxhall)


Griffiths, Rt. Hon. James (Llanelly)
Marsh, Richard
Stress, Dr. Barnett(Stoke-on-Trent,C.)


Griffiths, W. (Exchange)
Mayhew, Christopher
Swain, Thomas







Swingler, Stephen
Weitzman, David
Williams, W. T. (Warrington)


Taylor, Bernard (Mansfield)
Wells, Percy (Faversham)
Willis, E. G. (Edinburgh, E.)


Thomas, Iorwerth (Rhondda, W.)
Wells, William (Walsall, N.)
Wilson, Rt. Hon. Harold (Huyton)


Thompson, Dr, Alan (Dunfermline)
White, Mrs. Eirene
Winter-bottom, R. E.


Thomson, G. M. (Dundee, E.)
Whitloch, William
Woodbum, Rt. Hon. A.


Thornton, Ernest
Wigg, George
Woof, Robert


Timmons, John
Wilcock, Group Capt. C. A. B.
Yates, Victor (Ladywood)


Tomney, Frank
Willey, Frederick



Wainwright, Edwin
Williams, D. J. (Neath)
TELLERS FOR THE NOES:


Warbey, William
Williams, LI. (Abertillery)
Mr. J. Taylor and Mr. Cronin.


Watkins, Tudor
Wiliams, W. R. (Openshaw)

Bill accordingly read the Third time and passed.

Orders of the Day — CROWN ESTATE BILL

Considered in Committee.

[Major Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

Clause 1.—(CONTINUANCE OF CROWN ESTATE COMMISSIONERS, AND GENERAL PROVISIONS AS TO THEIR CONSTITUTION AND FUNCTIONS.)

8.30 p.m.

Mr. G. R. Mitchison: I beg to move, in page 2, line 15, to leave out "(4) The Commissioners shall" and to insert "and to".

The Deputy-Chairman: I think it would be convenient to discuss with this Amendment the next two Amendments in the name of the hon. and learned Member for Kettering (Mr. Mitchison), that is to say, in page 2, line 15, to leave out from "directions" to "as" in line 16, and in page 2, line 18, to leave out from "State" to the end of line 22.

Mr. Mitchison: Yes, Sir William.
Subsection (3) lays down the general duty of the Commissioners which, broadly speaking, as it is throughout the Bill, is to behave as good Tory landlords. Subsection (4) allows directions to be given to the Commissioners, but only as to the discharge of their functions under the Bill. The object of these Amendments is to allow the appropriate Ministers to give directions to the Commissioners even apart from their duties as good Tory landlords.
We take the view that an estate of the size and public importance of this ought Go be run in a way appropriate to just a little more than being a good landlord, and there ought to be power in the appropriate responsible Ministers to direct the Commissioners to use parts of the estate for some good public purpose.

We can each find our own instances. I remember at one time suggesting allotments—or was it small holdings for agriculture?—for part of it. Whatever the matter may be, the intention surely ought to be that the Government of the day, through the responsible Ministers, should be able to give general directions to the Crown Estate Commissioners.
I ought, perhaps, to explain to the Committee the way the Amendments would work within the terms of the Bill. Subsection (3) describes the general duty of the Commissioners
to maintain and enhance its value and the return obtained from it, but with due regard to the requirements of good management.
As amended, it would go on to say:
and to comply with such directions…as may be given to them in writing by the Chancellor of the Exchequer or the Secretary of State;
The Amendment will have the incidental advantage of shortening by several lanes what is already a very long and dull Bill.
This Amendment raises a point which, though it is limited to the Crown Estate Bill, is really one of considerable substance. It is fair to remind the Committee that there was a Bill in 1956 which became the Crown Estate Act of that year, which raised a good many of these points. As they are being re-enacted in this Bill, I propose accordingly, speaking only for myself, to put the points, substantial though I conceive them to be, as shortly as possible, and, again speaking only for myself, not to attempt to divide the Committee on any of them, however important I may think they are.

The Solicitor-General (Sir Jocelyn Simon): The result of these Amendments would be to impose a double duty on the Commissioners. The first one would be to maintain the Crown Estate as an estate in land, and to maintain and enhance its value. The second one, which is of equal validity and force,


would be to comply with directions given by the appropriate Minister.
As the hon. and learned Member for Kettering (Mr. Mitchison) said, this raises a point which was fully debated on, and determined by, the earlier Act. The point here really is that the Amendment would place a double and coincident duty on the Commissioners. In other words, the Minister would be able to give directions to the Commissioners to enter into transactions contrary to the duty to maintain the Crown Estate as an estate in land and to enhance its value. That is the only way in which it differs from the Bill as it stands at the moment.
Thus they would be able to use the Crown Estate as an instrument of Government policy, and that has two aspects. The first is the one determined on the earlier Act—whether it is right to use the Crown Estate as an instrument of Government policy. The hon. Member for Paddington, North (Mr. Parkin) gave the arguments for that course very fully on Second Reading, as indeed the hon. and learned Member for Kettering did more shortly. As to that, I would point out, first, that it was determined by Parliament in the earlier Act, and, secondly, that it would be entirely contrary to the recommendations of the Eve Committee, and therefore not acceptable.
However, I would point out another consideration, which I am sure the Committee would wish to have in mind. What we are concerned with here is not only the capital of the Crown Estate, which, of course, is surrendered into the hands of the Crown Estate Commissioners, but reverts to the Sovereign at the beginning of each new reign, and is then compounded. The revenues are surrendered, as the hon. and learned Gentleman pointed out on Second Reading, in return for the Civil List. While, at the beginning of each reign, we continue the arrangements that we have entered into for the last 200 years, the revenue is public revenue, and is part of the general revenue of the Executive.
Therefore, it is not right that it should be in the hands of the Executive to be used as instruments of Government policy in a way which is not capable of the same scrutiny by the Public

Accounts Committee and, indeed, this House generally, as are the ordinary revenues which are used as specific instruments of Government policy in the Estimates, thereby being subject to the control of the House.
I emphasise that second point, because it is the more important one. I know that the Committee would not be very impressed by the fact that we should be reversing a decision of three years ago. Hon. Gentlemen opposite below the Gangway would obviously argue about it, and quite rightly, because we are entitled to do so and should do so. But, in effect, all the arguments of the Eve Committee were against this. In addition to that, it is not consistent with our traditional concept of Parliamentary control of the expenditure of the revenue of the Crown. For those reasons, I could not advise the Committee to accept the Amendment.

Mr. B. T. Parkin: The Amendment of my hon. and learned Friend the Member for Kettering (Mr. Mitchison) would have improved this miserable Bill. I am very depressed to hear the Solicitor-General rejecting it. I am sorry now that I tabled an Amendment in my own name. If the Solicitor-General himself had tabled it, it would have been accepted.
In view of what the Solicitor-General said in his Second Reading speech, making reference to my own comment, he apparently believes—or somebody must have passed him a note to that effect—that the Crown Commissioners had in one case actually consulted the local planning authority. It would nat have hurt him.

The Solicitor-General: I certainly did not limit it to one case.

Mr. Parkin: I was hoping that the right hon. and learned Gentleman would have found time to explain a little more fully how he thought the Crown Commissioners ought to fulfil his duties. After all, he referred to the Eve Committee as if it had come down from the mountain with the tablets and the final word and as if the Government had accepted the lot. But the Eve Committee put quite bluntly and frankly its own difficulty, and asked that two duties should be written into the Statute. The first related to the management of the estate.
Secondly, in the light of general Government policy, it asked that these things should be put in the Statute. That is just what the right hon. and learned Gentleman has not done in the Bill. He has chosen to insert only the ordinary trusteeship duties which are inadequate, not only in my opinion but in the opinion of millions of people of all parties in the world. There is an increasing feeling that there is a problem here which has to be tackled on new ground. that it is a mistake to put large estates into the hands of trustees who are bound by certain rules and responsibilities to their trust, and to their trust alone, and that we must find a way of reintroducing the responsibility to the community.
I will not go over all that ground again, but I would remind the right hon. and learned Gentleman that there are seven pages of enactments to be repealed, and it is very tempting to quote some more of them. But many of them contain this ancient notion of stewardship and the ancient notion that the landowner is responsible for the people who live on the land as well as the exploitation of the land itself.
This is a backward step. This is not a Bill which is defending and consolidating ancient rights. These rights are not ancient, and they are not good they are modern developments of land holding and land administration. It is wrong that the Crown itself should now be loaded with this responsibility as though this was an ideal way of administering the property of the Crown.
8.45 p.m.
I do not find the Solicitor-General's arguments convincing when he says that, if the Commissioners follow the directions of the Government, this would be a way in which the Government would be expending public revenue without accountability to Parliament. After all, one could run through the sort of lecture one gives in this Chamber in the mornings, explaining how the British Constitution has evolved, how the Parliamentary system works, and how it alters every few years in the light of experience and if we can find in these cases other devices. But he has found no difficulty in accepting the fact that local authorities which own land can exploit it in various ways, from gran-

diose schemes right down to letting a bit of beach to an ice-cream vendor. No one feels that that is something which should come under the intensive control of the Auditor-General or of the Minister of Housing and Local Government. The right hon. and learned Gentleman has been working that one too hard. I hope that before we leave the Amendment we shall have a little more robust reply from him on the subject of the relationship between the Crown Commissioners and planning authorities. It is not much that I am asking for.

The Solicitor-General: It may not be much, but I think that what the hon. Gentleman is asking for is beyond the scope of this Amendment.

Mr. Parkin: I suggest that it is not beyond the scope of this Amendment, because the Amendment asks that the directions should come from the Government. In the Bill, of course, but silently, the Government have followed the recommendation—a most startling recommendation—of the Eve Committee that the Minister to which the Commissioners should be responsible should not be a Minister who has anything to do with the land of the country. On no account were the Minister of Housing and Local Government or the Minister of Agriculture to be brought in. Thus, not only were these two Ministers left out but they were made to sign the Bill on the back to show that they did not mind being left out. On the other hand, it is inconceivable that this Amendment could mean anything but that the Ministers of the Government should through the appropriate channel—which, in this case, would be the Minister of Housing and Local Government—get in touch with the planning authorities and ask their advice about these matters.
The right hon. and learned Gentleman must not take this rather sterile view about rents and values and possible losses of revenue, because it might be that proper, comprehensive planning would enrich the community in such a way that the return to the Exchequer in other ways would far outweigh the little bit of revenue that might be lost if the Crown Commissioners were instructed to use a certain piece of land in the interests of the community, instead of holding out for the last halfpenny of rent or for whichever activity would produce the biggest rent.
It is fair to insist that the right hon. and learned Gentleman should say more about this before we leave this stage of the Bill. We should know whether he has it in mind to introduce, if not into the wording of the Bill at least into its working, this notice that the Crown Commissioners, if necessary through the Ministers of the Crown, should comply with the requirements of comprehensive planning and should not throw away, as the repeal of the enactments seems to suggest that they are instructed to do, the old responsibilities of stewardship which lay upon the Crown as the ultimate owner of all the land in the country.

Mr. Stephen Swingler: The Solicitor-General is using a technical objection to obstruct the insertion of an important principle. He is arguing that because of a problem of Parliamentary accountability for Crown lands we are in some way inhibited or debarred from laying down principles which should govern the stewardship or management of Crown lands by the Crown Commissioners. I should have thought that that was not the case.
One thing which seems to emerge clearly from the Eve Report is that Parliament is responsible for laying down the principles on which the Crown Commissioners carry out their management. Incidentally, I hope that in the course of our deliberations we can make some criticisms of the Eve Report and that it will not be regarded as sacrosanct.
The question which arises is whether the principle to be laid down is that the pursuit of profit is always paramount, or whether other social considerations are to arise and be taken in account, either on an equal basis with considerations of profitability, or as matters of paramount importance. The question my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has raised is whether the desirability of economic and social planning of the use of land and sometimes the social desirability of using land in a less profitable way are to be included as part of the terms of reference of the Crown Commission. It is obvious that they should.
Throughout the Bill there is a stink of commercialism. It is in every Clause, and what the Solicitor-General has been

saying is that in all cases the only thing to be considered is the cash. That is what the Government are interested in as recipients of the cash, and that is why the Treasury is to be the controller and not Ministers who know anything about the use of land or have anything to do with it. Although those Ministers have their names on the back of the Bill, they have contracted out. It is the Treasury which will have a grip on the whole business, and it is the profit motive which will operate.
The Solicitor-General does not appear to appreciate that community welfare or public good should be considered by the Crown Commissioners. He uses the technical objection of the difficulty of Parliamentary accountability and refuses to lay down that some consideration of comprehensive planning of Crown lands might be desirable.
It is because of such considerations that an intelligent Government might give some directions to the Crown Commissioners. The Eve Committee recommended that the Crown Commissioners should not be subject to all the vagaries of Ministerial policy, and with the kind of Government we now have that is understandable. The Commissioners should not receive daily directions from different Ministers when those Ministers might try to push them around while they are trying to manage the Crown lands. But it was not the intention that there should not be directions about national policy on the use of land, national policy on agriculture, national policy on the promotion of parks for the benefit of the people, and national policy on seashores. It is obvious that the Crown Commissioners must take account of such national policy. It is obvious that they should receive directions from Ministers on such general national policies.
In spite of what the Solicitor-General said, I should have thought that it was obvious that in some cases such national policies ought to count for more than cash and the pursuit of the profit motive. The Solicitor-General does not agree. He is determined to elevate the profit motive above considerations of national policy of land use, social amenity, public welfare, and everything else. That is why we are being asked to reject the Amendments.
I hope that the Committee will violently disagree with this profit-making device of the Solicitor-General which will distort any intelligent and sensible policy for the use of Crown land, and accept these Amendments.

Mr. E. G. Willis: I support the Amendments because it seems eminently desirable that the Minister responsible in Scotland or in England or in Wales should be able to decide. In Scotland we have a Minister who is responsible not only for the Crown Commissioners, but, contrary to the generally expressed opinion that as such he should not be the Minister of Housing, or Planning, or Agriculture, he is the Minister for everything. He is our Scottish Pooh-Bah, and he ought to be able to give directions which would lead to the better use of these lands.
It is all very well for the Solicitor-General to say that there is no big money-grabbing aspect to this, but when I read the Annual Report for this year I find that in Scotland eight farms with vacant possession were re-let by tender, the rents being increased from £340 to £1,340. That is a steep increase in rent. It may be justifiable, but it seems to raise a number of questions about whether this is to be the policy, or whether we are to use the land in the best interests of the community.
Suppose that in Scotland the Secretary of State desired to establish a demonstration farm on Crown land in Caithness. Only this morning we were advocating that he should do this. Would the Crown Commissioners be able to say that from a financial point of view it would be better to feu this land as a sporting estate because one of the Tory Members of the House of Commons, or of another place, would be prepared to pay a substantial rent for a few months sport during the summer? It is likely that the rent which would be received for the property as a sporting estate would be very much more than the rent which could be expected from the Department of Agriculture.
Surely, in those circumstances, it is right that the Minister should be able to give a direction and say that he would like this land to be feued for the purpose of a demonstration farm? I cannot see anything wrong with that proposition. That is what the Amendments are

seeking to do, and it therefore seems that there is a good case for accepting them.
I could quote other similar cases appertaining to Scotland, but I think that the case I have quoted makes my point sufficiently well for the Amendments to be accepted. Are we to have sporting estates, rather than something for the benefit of the community in the North of Scotland, and rather than trying to rehabilitate the Highlands and build up our agriculture? I am confident that the people of this country would prefer to see the latter course adopted. For that reason, I sincerely hope that the Government will think again about these Amendments.

9.0 p.m.

The Solicitor-General: I can reply shortly to the two main points which have been raised in the debate. First, is it true—to use the words of the hon. Member for Newcastle-under-Lyme (Mr. Swingler)—that the pursuit of profit is always paramount under this Bill? He suggests that that is the duty imposed an the Commissioners. If the Committee will look at subsection (3) they will see that the duty is quite different. It is
to maintain and enhance the value"—
of the Crown Estate—
and the return obtained from it, but with due regard to the requirements of good management.
In other words, even though a greater profit might be made by what would be regarded as bad estate management, nevertheless the Commissioners have to have regard to the principles of good management in deciding their rental and sale policy.

Mr. Willis: Will the right hon. and learned Gentleman apply that argument to sporting estates?

The Solicitor-General: I always try to reply to the points raised in debate.

Mr. William Ross: We, as Scotsmen, will try to get used to that.

The Solicitor-General: Clause 3 (1) modifies the requirement to get the best consideration in the way of rental purchase price by its last phrase,
having regard to all the circumstances of the case.
Furthermore, the terms of Clause 4 seem to me to respond exactly to the demand


of the hon. Member for Paddington, North (Mr. Parkin), namely, that there should also be a responsibility to those who live on the land. It is an exaggeration to read Clause 3 as if it demanded the screwing out of the last penny that can be got from the use of the Crown Estate. That is not at all the way in which the Commissioners approach their responsibility.
The hon. Member for Paddington, North, echoed by the hon. Member for Newcastle-under-Lyme and the hon. Member for Edinburgh, East (Mr. Willis), have demanded that the Commissioners should be directed to use their powers, in derogation of the general duty imposed in subsection (3), to carry out specific Government policy. Is it really the job of the Commissioners of Crown Land to provide experimental farms? It is true that they represent the Crown, but they represent a particular manifestation of it, and their job is to manage the Crown Estate in the general way laid down in the subsection. They do not represent the Crown as the guardian of the interests of agriculture. If there is an experimental farm to be provided in Scotland, that is the job of my right hon. Friend the Secretary of State for Scotland. He will provide it wherever it is most appropriate. The hon. Member for Paddington, North—

Mr. Willis: I gather from the argument of the right hon. and learned Gentleman that the Crown Estate Commissioners have an obligation if in fact they consider that financially it is in the interests of the Crown estates to let that land, it may be for sporting purposes, rather than to feu it to the Department of Agriculture in Scotland at a reasonable feu despite that fact that we might desire the demonstration farm for which the land is to be feud rather than a sporting estate.

The Solicitor-General: The practical way, I imagine, that such a problem would work out is that, having obtained authority from Parliament to establish an experimental farm, the Secretary of State would decide where it would be best established having regard to the general convenience and the rent that wasdemanded by all the competing landlords who would be willing to sell to him. Of course, one of those landlords

would be the Crown Estate Commissioners.
I was going to expand the argument to the wider issue where it was put by the hon. Member for Paddington, North, namely, that the Crown Estate Commissioners should actively consider planning considerations. Again the Crown Estate Commissioners represent the Crown, but they do not represent the Crown as the guardian of the general interests of the community. That is the job of my right hon. Friend the Minister of Housing and Local Government. It is his job to see that planning considerations are paramount, as I pointed out during the Second Reading debate. What the Crown Estate Commissioners do, and what it is important that they should do, even though they are not bound by planning directions, is to cooperate closely, and as a matter of routine, with the local authorities. They plan their developments to fit in with the development plans.

Mr. Parkin: The right hon. and learned Gentleman started by saying precisely that the Crown Commissioners cannot be charged with the duty to consider the interests of the community as a whole in that particular function. He went on to say that that was the jab of the Minister of Housing and Local Government. Then he said that the Crown Commissioners, "though not bound by planning considerations…" Is it really true that Crown lands are exempt from the planning consideration of, say, the county as a whole? It is a very startling statement. If the Commissioners are not so bound, they will not be instructed in this Bill to pay attention to the requirements of comprehensive planning and there is no direct link with the Minister. From what the right hon. and learned Gentleman has said, the Minister of Housing and Local Government will be impotent to enforce his requirements on them unless the Commissioners want to play.

The Solicitor-General: This ought not to be very startling to the hon. Gentleman. I dealt with it specifically during my speech on Second Reading. Having made a forty-five minute speech, and more, himself, it is a pity that the hon. Gentleman did not wait to hear what I had to say in reply, though I can well understand—

Mr. Parkin: The right hon. and learned Gentleman did say that he was not going to reply.

The Solicitor-General: I said that I was not going to reply to his attractive invitation to discuss the theories of Henry George, as the hon. Member will remember. In fact, I did refer to the planning considerations the hon. Gentleman urged and what I pointed out, as is well known to the Committee, was that the Crown is not bound by the planning Acts and particularly by the Act of 1947. Those who build on Crown land are, but the Crown itself—and therefore the Estate Commissioners—is not. But in so far as there is a theoretical lacuna, it is met by the fact that the Crown Estate Commissioners—as indeed does every manifestation of the Crown—respond to and co-operate in development plans, so that their development does not run counter to planning considerations.
If I may return to the point raised by the hon. Member for Edinburgh, East, I have just been given information that one of the Crown farms on a Scottish estate is in fact let to the North of Scotland Agricultural College for use as an experimental farm. I hope that the Committee will be satisfied that the balance struck by this Bill is the right one and that the hon. Member will withdraw his Amendment.

Mr. Swingler: I am not a bit satisfied with the reply of the Solicitor-General, which I believe makes the situation far worse. First, he said that the Crown Commissioners are in no way bound to pay attention to planning; they are not subject to the planning laws. Secondly, we find in the Bill no power in relation to the Crown Commissioners on behalf of the Minister of Housing and Local Government, who is responsible to the people of the country for planning.
The Solicitor-General assured us that the Crown Commissioners are very benevolent people who take all these things into account, but we as Parliament are supposed to be laying down terms of reference. The Solicitor-General is engaged in an exercise of resisting insertion in the Bill of any considerations about the economic, social or housing planning on the ground that the Crown

Commissioners take all these things into account, although they are not subject to the planning law. He says that therefore this is entirely unnecessary.
I should have thought it would be a dereliction of duty on our part, having heard the Solicitor-General, not to insist that these matters should be inserted in the Bill. In spite of what he has said about references throughout this Bill to considerations other than cash nexus, he must recognise that in every Clause of the Bill there is emphasis on money considerations. He referred to Clause 3. All he referred to about general provisions relating to management by the Crown Commissioners is subject to:
to be determined in such manner as, in their opinion, is calculated to secure to them the best consideration in money or money's worth which can at that date reasonably be obtained.
That is the theme of the Bill, the pursuit of profit whether in the use of land as grouse moors or raising rents. That is what we are asked to lay down as the burden on the Crown Commissioners. However paternalistic or benevolent they may be, we are asked to pass this Clause to lay upon them the duty at all points to pursue profit, raise rents and get the highest price for land in circumstances in which they are not subject to the laws of social or economic planning such as are passed by Parliament.
The very fact that the Crown is not subject to planning in any form should mean that the Minister of Housing and Local Government and whoever represents him in Scotland—I am not quite sure of the position there—should have additional power in relation to the Crown Commissioners about the beneficial use of this land. We should insist on writing into the terms of reference for the Crown Commissioners in this Bill that they should have most regard to the beneficial use for the community of this land and less regard to the pursuit of profit.

9.15 p.m.

Mr. Ross: Will the Solicitor-General have another look at this question in relation to Scotland and perhaps consult the Lord Advocate as to the real position? We are concerned about the actual words that appear here and now, and whether these will be the words that will discipline and tie the actions of the Crown Estate Commissioners.
It is all very well for the Solicitor-General to say, "We do not need to worry because already a Crown farm has been released to the North of Scotland Agricultural College." He is talking of something that we done in the past. It may be that if this Clause had been in existence at that time the Commissioners would not have been able to do it. We have not the facts and we do not know how long it is since this transaction was arranged. It may be that in the interpretation of this Clause they would not have been able to do it.
With all due respects to the learned Solicitor-General, he did not raise the point made by my hon. Friend the Member for Edinburgh, East (Mr. Willis). We do not know whether this Crown farm could have been let to some one who could afford a higher rent. We do not know what the terms are under which the North Scotland Agricultural College obtained it. The Commissioners might be duty-hound by this Measure to get rid the College as quickly as possible and get someone else who could pay a higher rent.

The Solicitor-General: I speak subject to the Lord Advocate because this is a matter of Scottish law. As I read the Bill, the Commissioners should have due regard "to the requirements of good management", and that would imply a reasonable continuity and a reasonable relationship between landlord and tenant.

Mr. Ross: That would depend on how it has been granted and under what tenure it is held by the College. Is it a lease? If so, for how long? If it is a yearly lease, it may well be that the College is doomed in relation to this farm after the passing of this Bill. I doubt very much whether it is feu. Our objection is that we think that this Clause is far too tightly drawn and that we are placing the commercial criterion far too heavily on the Crown Commissioners. I hope that the Solicitor-General will look at it from that point of view.
Who is to interpret the words "good management"? It must be the Commissioners; but in what terms will they interpret them? It may well be in relation to the commercial aspects. That is borne out by the fact that even where the Ministers concerned are due to issue a direction in writing, before they do so they have to bear in mind this ques-

tion of good management which has been laid upon them—the right "to maintain and enhance" and consult the Commissioners before they can issue the direction in writing.
The more we examine this, the more I think that the Crown Commissioners will be tied by business. It may well be that they are bound to give consideration to the short-term advantage rather than to the long-term advantage, which may be to the advantage of the Crown Estate. This concerns the whole history of the Crown Estate. If this Clause had been in existence when John Fordyce determined to take action in relation to Regent Street and Regents Park, I wonder whether he would have been able to do what he did to preserve the future development of that area and so enable us to discuss it tonight. He was a Scot. For a long time he had his office in a ruinous building in Scotland Yard.
I ask the Solicitor-General to look at this problem from this point of view. I ask him to consider the long-term commercial advantage, because he has failed to answer the questions put by my hon. Friend. If the Crown Estate Commissioners had the alternative offer, in respect of this piece of land, of a pilot farm or a sporting tenant and the latter was able to offer more, they would be duty-bound to take the offer of the sporting tenant, according to my reading of the provisions. The Commissioners own about 8.000 acres in Caithness. It may be that they would benefit, for instance, from the work of the pilot agricultural unit, which might enhance the value of their own estates, but apparently that consideration must be swept aside and they must judge on the purely commercial aspects of the two proposals.
The Amendment is very reasonable and sensible and merits much greater attention than it has had from the assembled multitude of Ministers concerned, legal or otherwise.

Mr. Reader Harris: A great deal seems to turn on the words
with due regard to the requirements of good management".
They are very important words. A few words like those can be extremely important in a Bill, and unless they are dealt with as the Bill goes through the


House they can rise up like ghosts and haunt the House for years afterwards, as was the case with the words in the Nationalisation Acts which were passed in the first five years after the war stipulating that the nationalised body must make a profit "taking one year with another". How many hours have we spent trying to decide the exact meaning of those words?
In this Bill we have
with due regard to the requirements of good management".
I listened to the Solicitor-General with great interest and respect, as I always do, but I should like to add a few words to what he said, I am afraid not entirely in agreement with him. I work in a property development company, and I therefore have some knowledge of what is meant by the words
with due regard to the requirements of good management".
If the Crown Estate Commissioners were a private company or a public company registered under the Companies Acts, which I know they are not, their main consideration would be to get the best return for the owners of the company, who are the shareholders. In this case the owners, so to speak, are the Crown.
What is the yardstick of good management? I will put forward a point of view, and I hope that my right hon. and learned Friend will tell me whether I am wrong. When one is selling a property the yardstick of good management is to get the maximum price for it. I know of no other yardstick. When one is leasing a property the yardstick is the amount of money one gets for the lease and the strength of the covenant of the lessee.
May I pose a hypothetical case to my right hon. and learned Friend? It is not as hypothetical as hon. Members may think because it arose specifically in my company recently. What happens if there is a commercial building for letting in an area in which there is a shortage of such accommodation, and a dentist, who is giving service under the National Health Service, who cannot obtain accommodation anywhere else, and whose services are urgently needed, says that he wants 1,800 sq. ft. or 800 sq. ft., say, as office space, and another company, possibly a road haulage company

or some other commercial concern, also wants that space? Under the terms of good management it is the duty of the property company to let it to the haulage concern. It is not under a duty to let it to the dentist, because the covenant of a company is always better than the covenant of an individual, unless the company is about to go into liquidation. Generally speaking, one lets to a continuing corporation rather than to an individual, who may die. That is good management from the property company's point of view and it would be good management from the point of view of the Crown Estate Commissioners.
It is not unreasonable to ask that words should be inserted in the Bill to impose on the Commissioners the duty to have regard to social and planning considerations. Perhaps it would not be so bad if the Commissioners were subject to the compulsory purchase order procedure. So far as I know, they are not. If it is the duty of the Commissioners to get the best return, they will get all sorts of people. I do not overlook the fact that today the Commissioners have among their tenants London's foremost gambling casino. I refer to the one in Hamilton Place. There is nothing wrong with that. It is run by a company and no doubt its covenant is good. No doubt it can afford to pay a very good rent. I do not suggest for one moment that some hard-up dentist wants to take the premises over, because they would be far too expensive.

Mr. Willis: Which casino is this?

Mr. Harris: It is Les Ambassadeurs. It is one which has been set up under the new legislation. It is perfectly legal. I happen to know that it is on Crown Estate property, because it always has been Crown Estate property. Before the war the building was occupied by a Member of Parliament.
These are important considerations. It is not unreasonable to ask that the Commissioners, when considering to whom they should let or sell, should have regard to considerations other than that of getting the maximum amount of money. That is the consideration quite clearly laid down in Clause 3 (1), which says that nothing is to be sold, let or otherwise disposed of
except for the best consideration in money or money's worth which in their opinion can


reasonably be obtained, having regard to all the circumstances of the case.
Perhaps the words
having regard to all the circumstances of the case
are some let out, but it still does not override the words in Clause 1 (3)
with due regard to the requirements of good management.
This is very important from the point of view of property developers. I know they are not very popular, but they are doing a good job for post-war Britain. They very often do this job under tremendous difficulties. [Interruption.] Hon. Members can attempt to shout me down as much as they like, but their interruptions do not invalidate my point.
I ask hon. Members to consider what would happen if a comprehensive development is to be done in the centre of a town. It is a development which everybody in the Committee would agree is necessary, because the buildings are rat-infested and they should be pulled down and rebuilt. Under present procedure it is extremely difficult for anybody other than a local authority to get all the various interests together, because it is such a colossal task.

The Deputy-Chairman: I think that the hon. Gentleman is tending to stray a little far from the Amendment.

Mr. Harris: I apologise.

Mr. Willis: On a point of order. If the area to be redeveloped were Crown land, it would come within the terms of the Amendment, would it not?

Mr. Harris: That is exactly the point I intended to make. I was going to suggest that it was a large area which needed redeveloping and that a portion of it was owned by the Crown Estate Commissioners. Would they be entitled to hold out indefinitely or be difficult? If a private owner is difficult, a compulsory purchase order can be made by a local authority. This cannot happen in the case of the Crown Estate Commissioners. If this body is to be lifted outside the normal procedure, it would be reasonable to insert words imposing on the Commissioners the duty to pay regard to social and planning considerations.

9.30 p.m.

Mr. Willis: I rise to ask only one question, but, first, I wish to say how privileged we are to have with us the right hon. Gentleman the Secretary of State for Scotland. I wish to put this question because I do not accept the reply which the Solicitor-General gave. The Solicitor-General said a great deal about the matter, but he did not, in fact, reply to the point I was making about the activities of the Crown Commissioners. Thus I now put the question to the Secretary of State, for he is the Minister of Agriculture for Scotland.
Let us assume that the Secretary of State has decided to establish a model farm in Glenlivet, which is Crown property, and let us suppose that he has decided that nowhere else would be suitable except on a Crown Estate. He, as the Secretary of State, might apply to the Crown Commissioners for a lease or a feu, or whatever it is, but, as the Secretary of State, he can give general directions to the Crown Commissioners. And this is the interesting thing; bearing in mind subsection (3), he can only give directions
…with due regard to the requirements of good management.
Supposing the Crown Commissioners say to him, "You know, we have had a handsome offer from an American millionaire who likes to shoot red deer." Let us suppose that the Crown Commissioners say that that American gentleman wants to spend a couple of months each year in the Highlands in order to adorn his Kentucky home with a few head of deer. Such a gentleman might be prepared to pay a very high price for the land. This has happened in Scotland, and it is, in fact, one of the curses of Scotland.
In those circumstances, what is the position of the Secretary of State? I am sure that the right hon. Gentleman has given this matter a good deal of consideration and no doubt he has been duly advised by the Lord Advocate, which is one of the reasons why I am rather dubious about the information. What would the Secretary of State consider to be his duties with regard to the term
…with due regard to the requirements of good management"?
We have had long discussions with the right hon. Gentleman about sporting


estates and it is quite obvious that he places great faith in the defence of sporting rights. I see the right hon. Gentleman nodding his head, I think. Meanwhile, he has allowed crofters to pay thousands of pounds to keep the deer out, but not the landowner, who should keep the deer in.
I assume, therefore, that the right hon. Gentleman considers that a sporting estate for an American coming to Scotland would be administering this property
… with due regard to the requirements of good management.
But what happens, meanwhile, to his poor model farm? What does the Secretary of State do in these circumstances? The Solicitor-General did not answer that question and our case is that it would be in the interests of Scotland to have the model farm—and if that means losing a few hundred pounds a year, we still should have it.
But this Bill says "No". The Bill says, in effect, that we shall have the American millionaire with his fifth or sixth wife, and probably her relations as well, and they—[Laughter.] I will not be tempted further—will duly shoot on the tenantry each summer. In these circumstances I do not think that hon. Members should accept this state of affairs. It would be wrong to accept it and the Government should consider this Amendment afresh.
I would only add that if the Financial Secretary should think of intervening this evening, I hope that he will not again retail that joke of his about what the noble Lord, Lord Boothby, said about the hon. Member for Edinburgh, East speaking in the Scottish Grand Committee. I say that only because the Lord Advocate has since then made a much better crack, and if the Financial Secretary wants to be up to date I hope that he will consult us, when we will tell him the new story so that he can tell it to us.

Mr. Parkin: The Solicitor-General should be flattered by the interest he has aroused in this Committee by some of his stimulating ideas, and I only hope that he can find time to elaborate one of them a little further. He has only himself to blame for walking into the problem of landlord, tenant and good manage-

ment—he started that one, not this side—and I was glad to hear his hon. Friend the Member for Heston and Isleworth (Mr. R. Harris) take him up on it.
We on this side have for a long time been struggling to cope with the obsession, not only of those who drew up this Bill, but of the Minister of Housing and Local Government and his advisers, with the idea that one could solve the problem of land if only decent people would behave themselves and come to a reasonable contract between landlord and tenant.
The Solicitor-General has again tonight used the phrase, "the relationship between landlord and tenant", but he leaves out of account the fact that the community also has to have a say in this. We must insist that the root of the weakness of this Bill, as of the land and housing policy of the Government is that, in all honesty and rectitude, they believe that it is only a matter of landlord and tenant being honourable and decent in a partnership of two when it is a partnership not of two but of three.
It is when the Solicitor-General begins to expand his views on the nature of the monarchy that I am fascinated and want to ask for more. There is this expression that the Crown Commissioners are not the Crown but a manifestation of the Crown. This is worth a book—this is the new pluralism—but is he not himself a manifestation of the Crown in his functions? He nods assent—that is splendid.
The right hon. and learned Gentleman instanced the Crown Commissioners in one of their duties refusing to sell land for a model farm and says that that is the business of the Secretary of State for Scotland. Apparently, the Secretary of State for Scotland has to ask other private land owners. I do not know what truth there is in this legend about all Scotland being occupied by sporting estates, shooting and the rest—is it true? Is it still going on—this eating of more and more properties?
The Solicitor-General has said that it is the duty of the Secretary of State for Scotland not to apply to the Crown Commissioners but to ask if someone will sell him a farm. Apparently he has to hike round Scotland, knocking at people's doors. When they ask who he is, he says, "I am a manifestation of


the Crown. I should like to buy some of your land." They would lock him up. It is crazy. It does not make any sense at all. Or, if the people have been following this business, they will tell him, "Talk to one of your other manifestations, and see if you can fix it up between you."
We have to get a decision on this. The Crown Commissioners are not the Crown, but only a manifestation of the Crown. Then, suddenly, they are invested with all the sovereign rights of the Crown. They are exempted from the regulations about planning. At one moment they have all the rights of the Crown and, at another, none of the responsibility of the Crown. "The responsibility is on my right hon. Friend", says the Solicitor-General, but how can the right hon. Gentleman execute that responsibility if he has to go cap in hand to ask if someone will sell him a hit of land for a model farm?
This is all capable of leading to some very nasty conclusions about the object of the exercise. Is it intended that this Measure should add further pressure behind the inflation in land prices? That is exactly what the Secretary of State for Scotland will do. He will put up the prices all the way round. He will not get the land anyway; he will make a bid and he will be turned down. But the gentleman who will use the land for another purpose will simply pay a little more.
One manifestation of the Crown will be set against another. Where is my hon. Friend the Member for Erith and Crayford (Mr. Dodds)? We need a new Mock Auctions Bill. All the manifestations of the Crown will be bidding against one another for a piece of land which is theirs anyway. Please, may we have some more about this and, perhaps, a promise of a book from the right hon. and learned Solicitor-General when he has finished with this Bill? It is the most fascinating constitutional concept that I have heard for a long time.

Mr. Mitchison: My hon. Friends have seized with vigour, enthusiasm and picturesque fertility of imagination on the intention of the Clause. There was no such Section in the 1956 Act. I believe that this is the first time that the duty of the Crown Estate Commissioners has

ever been defined. I do not think well of the Government for refusing to accept the Amendment. On the other hand, it is fair to say that, the Government being that Government, I never for one moment thought that they would.
The point is very simple. Are the Commissioners to act as landlords or are they to recognise any other public responsibility? Even more important than the fact that they own some rural land is the fact that most of their revenue, two-thirds of it, comes from urban property in London which includes three housing estates where they have adopted the policy of some landowners and, though I suppose they need not have done, applied the increases required by the Rent Act. I should regard a matter of that sort not as a matter which ought to be determined by the very limited cannons of good management and the like, on which the hon. Member for Heston and Isleworth (Mr. R. Harris) rightly and knowledgeably informed us, but as a matter of public policy under the direction of the responsible Ministers. It is the object of the Amendment to allow the responsible Ministers to give those directions irrespective of the very narrow words—for they are narrow words—which otherwise define the duty of the Commissioners.
The Government are entirely wrong. If they wanted a good argument, I could have given them a much better one, namely, that there is no authority in England at present which really deals with questions of the use of land, and the Chancellor of the Exchequer and the Secretary of State for Scotland are no real substitute for a proper body such as a Land Commission or something of the sort to deal with the use of public land of this kind.
I refer to "public" land. It is 200 years since the practice began of handing the Crown lands over to Parliament or the Executive—as one may like to put it—at the beginning of each reign. No constitutional monarch now could cease to do it whether or not the constitutional monarch got a Civil List in exchange. It was just about the same time that Queen Anne declined to sanction an Act passed by the House of Commons and the House of Lords. That is not done nowadays, and neither would the Crown


Estates be treated as anything but what they are, public property.
The whole balance every year goes straight into the Exchequer. All that is happening here is that the Treasury is playing its old game of trying to make as much money as possible without due regard to public considerations and interests.
I shall not ask leave to withdraw the Amendment—not for worlds—but I shall not vote about it.

Amendment negatived.

9.45 p.m.

Mr. Willis: I beg to move, in page 2, line 30, to leave out "shall not", and to insert "may".
I think it will be for the convenience of the Committee if we discuss with this Amendment the next two in my name and the names of my hon. Friends—in line 33, leave out "nor shall", and insert "and", and in line 34, leave out "be concerned to", and insert "may". They are all designed to alter the meaning of this subsection.
As at present drawn, the subsection provides:
(5) The validity of transactions entered into by the Commissioners shall not be called in question on any suggestion of their not having acted in accordance with the provisions of this Act regulating the exercise of their powers, or of their having otherwise acted in excess of their authority, nor shall any person dealing with the Commissioners be concerned to inquire as to the extent of their authority or the observance of any restrictions on the exercise of their powers.
Our Amendment seeks to reverse the position, so that the validity of transactions entered into by the Commissioners can be questioned. It seeks to give people the power to inquire, and also to to enable the Commissioners to be challenged, within the limits of the subsection. We propose this because we are amazed at this provision which seems to us to be very far-reaching. As far as I can see, it raises the whole question of what the dickens we are considering this Bill for. Why should we spend hours and hours discussing and considering a Bill which sets forth the powers and duties of the Crown Estate Commissioners, and write into that Bill that if they pay no attention to what we think, nobody can question it? That seems to

me to be beyond understanding. That is the position. Admittedly, I have put an extreme case, but that can be done under this subsection.
The Crown Estate Commissioners need not pay any attention to anything in the Bill, and, according to this subsection, nobody can question it. Is not that rather ridiculous and absurd? I should have thought that it was rather absurd, and that, in as much as the Commissioners are more or less acting as a Committee for the Government in the administration of these lands, they should be open to question in the same way as any other Government Department is open to be questioned and also challenged.
I appreciate the fact that the Commissioners are not exactly in the position of a Government Department. I appreciate the fact that the Eve Committee recommended that they should not be placed in that position, but it seems to me that their actions ought to be questioned. As I understand it, the Crown Commissioners can do anythink they like on their own land, and nobody can say a word to them. If they refuse to report to the House or to prepare accounts, nobody can question them. I want to ask whether the Chancellor of the Exchequer can question them if they refuse to prepare accounts and present them to him each year? Can the Comptroller and Auditor-General question them? I do not know, because the powers set out in this subsection seem to me to be so sweeping that if they did not do any of the things in this Bill, they could not be questioned.
The second point is that which I have mentioned already in passing. It is that my hon. Friends and myself believe that the Commissioners should be in a position to be challenged, if necessary, by any individual who is adversely affected by them if he thinks that they are acting outwith the powers given to them in this Bill. That seems to me to be a very humble request to make.
I think it was a Socialist Government that gave the citizen the right to take proceedings against Departments. It seems to me that here we are reversing the process. I deplore this, and I should like to see the process strengthened. It


is much more democratic and much more in accordance with the spirit of the times in which we happen to be considering this Measure.

The Solicitor-General: I think that I may be able to shorten the debate by indicating the actual scope of the subsection. It is not as far reaching as the hon. Member for Edinburgh, East (Mr. Willis) fears.
This is purely a conveyancing provision. It is not for the protection of the Crown Commissioners. It is for the protection of those who deal with them—their purchasers and tenants—and is, indeed, almost virtually and in substance a re-enactment of pre-existing law.
Under the pre-existing law the conveyances and so on had to be registered, but that was purely a piece of machinery. Once they were registered, their validity could not be called in question, in effect, by the Commissioners. The object is that someone dealing with the Commissioners, taking a contract, shall not have to ask whether what is done is within the powers of the Commissioners. The hon. and learned Member for Kettering (Mr. Mitchison) will bear me out that this is within the trend of all modern conveyancing legislation. It is very similar to what was done under the Settled Land Act, where what Parliament sought to do was to interpose a screen beyond which the purchaser, the lessee and so on need not look in the way of examining title. This provision does not say that transactions entered into by the Commissioners shall not be called in question. What is involved here is the validity of the transaction.
The hon. Member for Edinburgh, East said that an individual should be able to challenge the Commissioners if he is injured. I entirely agree. There is nothing here which will prevent his doing so. For example, if a tenant claims that the Commissioners are in breach of duty as landlord, he can challenge them in the courts in the ordinary way. This provision does not stop that.
Similarly, the duty to present accounts or to make a report under Clause 2 is not affected. To take an example of rather different scope, under Clause 4 (2): if, for example, the Commissioners made a voluntary payment which was not sanctioned by that Clause,

it would not be protected by this Clause. It could be examined by the Comptroller and Auditor-General, it could be investigated by the Public Accounts Committee, and in the last resort, I suppose, it could be the subject of a surcharge on the Commissioners.
I hope that the hon. Gentleman will be satisfied with my explanation that this is virtually re-enactment—modernisation but re-enactment—of existing law, and that it is purely a conveyancing device for the protection of those dealing with the Commissioners.

Mr. James McInnes: In spite of the explanation given by the Solicitor-General, I can well understand why my hon. Friend the Member for Edinburgh, East (Mr. Willis) has queried this matter. It seems to me that what we have here is largly English legal terminology. I should have preferred a reference to the validity of conveyancing transactions, or, at any rate, something fuller than the words in the subsection.
I think that my hon. Friend was absolutely justified in challenging the points arising from the Clause. As the Solicitor-General indicated, it is rather difficult to understand. As the right hon. and learned Gentleman said, what is covered here is the validity of the transaction. Subsection (5) appears to me to read:
The validity of transactions entered into by the Commissioners shall not be called in question …
That conveys to me all sorts of transactions. Further on, the subsection says:
… nor shall any person dealing with the Commissioners …
by able to inquire or to challenge the Commissioners or to do anything of that kind. I should like to hear the Lord Advocate outline briefly the implications of this Clause in Scottish legal terminology.

The Lord Advocate (Mr. William Grant): I do not think I can do it better than my right hon. and learned Friend the Solicitor-General, because the Clause applies equally to Scotland. The hon. Member for Glasgow, Central (Mr. McInnes) made a slight mistake. In line 34 the words are "be concerned to inquire." That is to say, the purchaser need not do it. Otherwise, if a purchaser took a title he might well have to inquire, or his solicitor would have


to inquire at some expense to him, whether the Commissioners were acting within their powers. All this says is that if the title which he gets, whether it be an absolute disposition or a lease or a feu, is on the fact of it a good title, then, have been registered, it is a valid title and it cannot be gone behind merely because there has been a flaw behind the scenes.

Mr. Willis: We are glad to welcome the Lord Advocate to the Dispatch Box to explain in Scottish legal terms what the Bill means, and to have somebody, who at least is suppose to understand Scottish law, explaining to us what that law is. I understand it now, and if the subsection means that I am willing to withdraw the Amendment.
I am wondering about the word "transactions", however. Does the word have a legal meaning in a Statute, or does it refer only to documents? It might mean anything. I have not a legal dictionary with me to look up the meaning, but it is a word which is, to me, capable of fairly wide interpretation. Perhaps the Lord Advocate can answer that point. If not, perhaps he will look at this before the Report stage to make sure that the Clause means what he says it means.
Certainly, in our lay minds on this side of the Committee, we are rather doubtful about it. Our experience in the Scottish Grand Committee is that our lay minds are much more accurate than the Lord Advocate's legal mind. Would he have a look at this point or give an assurance that, in a Statute, this word has the meaning he has given to it and is confined to conveyances?

Mr. Ross: I wish to ask whether or not the only kind of transactions that can be entered into by the Commissioners are conveyancing transactions. There are other transactions. If the Lord Advocate means this to apply purely to the question of conveyancing he should insert a qualifying word before "transactions". I ask him to give sympathetic consideration to that point.

Mr. William Hamilton: The Lord Advocate referred to the phrase
nor shall any person dealing with the Commissioners be concerned to inquire …

If the Government would consider using the phrase, "nor need any person"—

It being Ten o'clock The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.

BUSINESS OF THE HOUSE

Proceedings on the Crown Estate Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Redmayne.]

Orders of the Day — CROWN ESTATE BILL

Again considered in Committee.

Mr. Hamilton: I was saying that the Government could meet the two points which have been raised if they would insert some phrase before the word "transactions", in order to make it clear that they are the kind of transactions which the right hon. and learned Gentleman said they were, and if, instead of the phrase,
nor shall any person
they used the phrase, "nor need any person".

The Solicitor-General: If I gave the impression, as I am afraid that I did, that transactions are limited to conveyancing transactions, that was wrong. I gave that as an illustration. It can be any legal transaction, as it should be; because one must equally give the same protection to anybody dealing in any legal capacity, by way of contract as well as conveyance of land, with the Commissioners.
As to the other queries, I am always very willing, if the drafting of a Clause is called in question, to undertake to consider it further. I think that it is all right, but, in view of the observations of hon. Members, I will certainly consider it further with my right hon. and learned Friend.

Mr. Willis: In view of that undertaking, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Willis: The Clause deals with the continuance of Crown Estate Commissioners and general provisions as to their constitution and functions. I wish to raise a question which will help me to decide whether I shall support the Clause. It is on the arrangements made for dealing with Crown Estates in Scotland.
We put down Amendments, which it would be out of order to discuss now, to divide the Crown Estate Commissioners into two bodies. I can see nothing in the Clause to prevent a division into subcommittees. The Commissioners would be better able to fulfil their functions if they were so divided.
The Eve Committee dismissed Scotland in a most cursory manner. It is obvious that the people who sat on that Committee did not know much about Scotland or Scottish feeling.

The Temporary Chairman (Sir Godfrey Nicholson): The proposal which the hon. Member is making is not in the Clause and it is, therefore, out of order to discuss it on this Motion.

Mr. Willis: I was trying to explain, Sir Godfrey, why I thought the Clause should be rejected. I assume that I am in order in giving my reasons.

The Temporary Chairman: The hon. Member is not in order in giving his reasons why the Clause should be rejected if he is basing his argument on something which is not in the Clause. He can give reasons why the Clause should be rejected if there is something in the Clause which he does not like, but he cannot base his arguments on something which is not in the Clause but which he would like to see in it.

Mr. Willis: I am grateful for your guidance, Sir Godfrey, because there is something in the Clause to which I take objection. There is to be a body of Commissioners, but there is no specific reference to how they shall administer Crown Estates in Scotland. That is my objection to what is in the Clause.

The Temporary Chairman: The hon. Member is under a misapprehension. He is trying to argue on something which is not in the Clause but which he would like to see in it, and that is out of order.

Mr. Willis: I always try to keep in order. Subsection (1) says:

The Crown Estate Commissioners … shall continue to be a body corporate for all purposes, charged on behalf of the Crown with the function of managing and turning to account land and other property …
I think that that is wrong. Is it in order to say that it is a bad subsection? I think that it is wrong for the reasons that I have given. I will try not to wander outside the rules of order. I will confine myself to asking a few questions.

Mr. Mitchison: On a point of order, Sir Godfrey. Subsection (1) says:
The Crown Estate Commissioners … shall continue to be a body corporate for all purposes …
I suppose that my hon. Friend is entitled to say that he objects to there being a body corporate for the purpose of dealing with Scottish affairs.

The Temporary Chairman: The hon. Member is sailing near the wind. If he moves too far out he can rely on me to call him to order.

Mr. Willis: I am grateful to you, Sir Godfrey, for your Ruling, and I am also grateful to my hon. and learned Friend. I do not want to sail near the wind. I am a great constitutionalist. I like to be in order, and I will therefore content myself with asking a few questions.
How many Scotsmen are there among the Crown Estate Commissioners? How do they administer estates in Scotland? How often do they meet in Scotland? Where are they? Is there a subcommittee which deals specifically with Scotland? Although the Eve Committee dismissed Scotland in a cursory and disrespectful manner, it tended to point out the necessity for a management body for any large estate. That is the burden of paragraph after paragraph of the Eve Report, and that is why it recommended the setting up of the Crown Estate Commissioners.
Almost one-third of the Crown Estates are in Scotland and therefore the Crown Estate Commissioners ought to have a special organisation for dealing with those estates. How is the Scottish end of this business managed? I am always rather frightened that a body located in London and concerned with administering things down here tends to look on Scotland as some sort of remote region which does not require very much consideration. That is why many of the


affairs of Scotland tend to be neglected. We do our best to keep them before the House, as hon. Members know. We intend to press our claims. But that tendency exists, and if we have the Secretary of State for Scotland issuing directions to the Commissioners we should like to know at what stage he comes into the picture.
How often does he find it necessary to issue directions? Is it possible for him to issue directions regarding the administration of the Crown Estate in Scotland contrary to the wishes of the Chancellor of the Exchequer? Under the Clause it is nominally possible for the Secretary of State for Scotland to pursue a line contrary to that which the Chancellor may wish to pursue in England. Does the Secretary of State find it necessary to do that at times? Can he pursue a course which could give us the model farms that we are talking about, if the Chancellor thought that it was not a desirable thing to do? These are all important matters which arise directly out of the provisions of the Clause, and I hope that the right hon. Gentleman will give us answers to some of the questions, and tell us something about the administration.
The Secretary of State shrugs his shoulders, but we accept our responsibilities as Members of Parliament and we want to know. I hope that he will give us a clear picture of how this will work in Scotland. I hope that it will be done in a way which is free from southern influence, or a southern tang. We want to attend to our own business, as the Royal Commission on Scottish Government suggested that we should do in matters like this, where it is possible to separate the administration.

Mr. William Hannan: I support my hon. Friend the Member for Edinburgh, East (Mr. Willis). The Secretary of State for Scotland will recall the questions which my hon. Friend has put to him. My hon. Friend asked what proportion of the Crown Estate was in Scotland and he answered his own question by saying that it amounted to over one quarter. Where are they? These are matters that we want to know about. The Committee will note that the Explanatory Memorandum contains a reference to the fact that the greater part of the forest land has

been transferred to the Forestry Commission. Can the Secretary of State tell us what is to happen in Scotland in regard to that matter?
The hon. Member for Heston and Isleworth (Mr. R. Harris), in his admirable remarks, pointed out some of the dangers. The Clause repeals the existing Acts, which sought to lay down in detail how the Crown Estate should be managed. Instead, a general duty is laid upon the Commissioners to manage the Crown Estate on behalf of the Crown. As the Chancellor of the Exchequer said in the Second Reading debate, on 28th June—and this was the point made by my two hon. Friends—it makes this possibly desirable measure of freedom subject to a number of limitations and restrictions which are contained in the first five Clauses of the Bill. Clause 1 is too wide in scope, and I am glad that the Solicitor-General made clear what subsection (5) does.
Before assenting to the Clause, there is one very important matter that I should like cleared up. It concerns only one word. I hope that the Secretary of State will be able to give us a clear indication of what it is about. I refer to the proviso to subsection (6).
Provided that an advowson shall not be taken to be comprised…
10.15 p.m.
Will the Secretary of State tell us what is this new legal "animal"? Does it relate to what my hon. Friend the Member for Edinburgh, East was referring? When the Secretary of State and the Lord Advocate have made up their minds about what it is, will one of them make up his mind to give us a clear indication? It is most important that we should know what it means. I presume that it governs the whole of the Clause, because it is a provision. The meaning of this word affects the general content of the Clause. I hope that the Secretary of State will tell us what this means and that he will not do as did a former hon. Member of this House who represented the Gorbals—George Buchanan—who used to say, "Ipso facto, as we say in Scotland …" That will not do. We want to know what is meant by the term "advowson". We wish to know whether it is a guarantee, or what it is, because on the interpretation will depend the support which we give to this Clause.

Mr. W. Hamilton: Subsection (7) of the Clause says:
The provisions of the First Schedule to this Act shall have effect with respect to the constitution and proceedings of the Commissioners and other matters relating to the Commissioners.
In the First Schedule the provision is laid down that:
There shall be such number of Commissioners, not exceeding eight, as Her Majesty may from time to time determine.
I wish to ask whether the Secretary of State will have any voice in nominating people—

The Temporary Chairman: Order. That would be more competently discussed when we come to the First Schedule.

Mr. Hamilton: Subsection (7) refers to the First Schedule of the Act which refers to the constitution of the Estate Commissioners.

The Temporary Chairman: It often happen; that in a Bill a Clause refers to a Schedule, but the Schedule cannot be discussed until there is a Motion.

Mr. Hamilton: I am not referring to the Schedule. I wish to ask whether it is intended that the Chairman or the Deputy-Chairman shall be a representative from Scotland. I think that it is very important that one or other should be, and I should be glad if we can be told.

Mr. Swingler: Before parting with this Clause, I think that we are entitled to probe the Government's intentions a little further about the nature of the terms of reference being given to the Crown Commissioners, since we did not get a final reply after the previous discussion. We have had some interesting contributions, especially that from the hon. Member for Heston and Isleworth (Mr. R. Harris) but no reply was made from the Treasury Bench. One notices that the Scottish Ministers are always reluctant to make a contribution, but perhaps one of them will deal with the points relating to Scotland which have been raised and which are extremely important.
I wish to ask the Solicitor-General to explain the interpretation of this Clause so far as it affects the conduct which, so to speak, we are imposing on the Crown

Commissioners. Is it the intention of the Government, and particularly the Treasury, to say that money-making must be the prime motive of the Commissioners in carrying out their duties? We know that the qualification about being subject to the rules of good management is introduced here, but I am advised that this sort of qualification appears in the articles of very many private profit-making companies. They are also required to adhere to their articles and are subject to the requirements of good management, that is, good management in the pursuit of profit, good management in speculative bidding for the best properties and their use in the most profitable way.
Is the Solicitor-General saying that in respect of the centres of big towns the Crown Commissioners must always prefer the establishment of vice clubs to the establishment of health centres because vice clubs are more profitable? Apparently they are to prefer the establishment of gambling clubs, and we have had examples quoted. Are we being told that the Government desire the Crown Commissioners always to prefer deer stalking to the establishment of model farms? Is that to be the standard of values in the interpretation by the Solicitor-General of what this Clause means?
By this Clause we are converting the Crown Estates entirely into commercialism solely in pursuit of profit although, in fact, the Crown lands are public property. One would have thought it went without saying that because Crown Lands are public property they should be subject to public policy. On the other hand, it is apparently the desire of the Tory Government to profitise the Crown lands and make them subject to the profit motive. The Crown Commissioners are to have a mandate from the House of Commons to organise for the millionaires the pursuit of deer in Scotland and the pursuit of women in London, all in the pursuit of the great god profit.
We are debarring ourselves from using these extremely important pieces of land for the promotion of much needed schemes for the benefit of the people in housing, health education, amenities and so on. My conception of what we ought to be doing in this House of Commons


is considering how best these lands which happen to be under our control, the Crown lands, can be used for the benefit of the mass of the people for their health and welfare. Apparently the Solicitor-General tells us that by passing this Clause we are to impose on ourselves a self-denying ordinance that these high motives of public policy shall be disregarded and that the Commissioners shall be told to get on with the job of making money for the Tory Treasury. Is that what we are passing?

Mr. Parkin: It appears that the Secretary of State for Scotland is about to reply to this debate. Although I cannot expect him to deal comprehensively with some of the points we have put to the Solicitor-General, I hope that in his reply he will not be limited to answering the points raised by my hon. Friends who are Scottish Members because, in my view, these are not matters relating exclusively to Scotland.
When the bell tolls for a Scotsman who has to leave his country because

the land of his country has not been properly developed, it tolls in my constituency, too. When there is a failure to develop the land of Africa or of the West Indies, shackled and cramped as the people there have been by the private enterprise principle of grabbing for private ownership what should have been public ownership, the results are felt in the industrial centres of this country.
There are no matters exclusively concerned with Scotland. If there is anything which we should be getting into the spirit of this Bill it is the notion —which I should have thought common enough in the world, but which is strikingly absent from the Treasury Bench —the modern conception of one world and responsibility to people who live on the land. We shall have to go on spelling this out to those on the Treasury Bench in Clause after Clause, in Amendment after Amendment, and in Bill after Bill, until we get into their heads what is their only chance of survival in the modern world.

The Secretary of State for Scotland (Mr. John Maclay): I think that in the interests of clarity and for the avoidance of confusion between the Scottish and English matters it might be helpful if I cleared up some of the Scottish points now, with my usual admirable clarity and brevity.
As to the composition of the body, I was asked whether the Scots were properly represented, and, as usual, they are. We have one member. The composition of the body is the chairman, deputy-chairman, who is a permanent civil servant, two English members, one Welsh and one Scot, and two other part-time professional members. On all these members I am, of course, consulted, as I am consulted about everything, sometimes to my sorrow.

Mr. Willis: Mr. Willis rose—

Mr. Maclay: I am dealing with these points with clarity and brevity, and I am going on to the next point as to how this body will work.

Mr. Willis: Mr. Willis rose—

Mr. Maclay: The hon. Gentleman must let me complete answering his own questions, and the one that I want to deal with now is about how the body works. The whole point is that the general principles and policy issues that arise for the Commissioners are normally applicable to the whole country.
As to whether there should be a separate Scottish Commission, if there were it would mean having two policy-making bodies, separate from each other, and with all the difficulties of coordination that would be involved.
It has seemed better from the experience of some years to make special arrangements within the Commissioners' organisation as a whole for proper attention to be given to Scottish questions. There is a Commissioners' Scottish Group consisting of the Chairman, deputy chairman and Scottish Commissioner. The Commissioners have a Scottish solicitor as their legal adviser for Scottish matters. They have an

office in Edinburgh, and the day-to-day management of the landed estates is entrusted to local factors. The Scottish Commissioner keeps in close touch with, and makes special visits to, the Scottish estates from time to time. There is thus no question of the Scottish estates being run from the South. They are run on Scottish lines in Scotland under the general supervision of the Commissioners' headquarters and of the Scottish Commissioner. Those concerned with running them are available to advise the Board of Commissioners on the Scottish implications of the general policy questions that arise, as well as on any particularly difficult individual problems that may need to be considered by the Board.
These arrangements seem to be working very well. On past occasions when the possibility of having a separate Scottish Commission has been considered, it has not been thought that any such arrangement was necessary. I would point out as confirmation that this method of running it is almost certainly the best way we can devise, that the Royal Commission on Scottish affairs looked at it and it saw no reason for disturbing this position.

10.30 p.m.

Mr. Willis: In view of the great power which the right hon. Gentleman has over the Commissioners, may I ask whether he has agreed to the directive given to the Commissioners, contained in the last Report of the Commissioners, to the effect that the main outlet for fresh capital investment in Scotland will he sought in the immediate future in urban property, either by purchasing new property or by improving existing property, not by increasing Crown land for agricultural or other purposes? Has he agreed to that?

Mr. Maclay: I am advised that there is very little urban property. I will think out an answer to that question while I run through the others.
I was asked whether I had independent powers of decision and direction. The hon. Member for Glasgow, Maryhill (Mr. Hannan), who asked the question, usually studies all the provisions of the Acts with great care, but on this occasion he has slipped, because if he looks at


Clause 1 (4) he will find that the position is stated clearly
The Chancellor of the Exchequer and the Secretary of State shall act jointly in giving directions under this subsection, except that in matters not relating to Scotland
it is the Chancellor who acts and in matters relating to Scotland I act.

Mr. Hannan: The right hon. Gentleman should not look accusingly at me. I did not raise that matter.

Mr. Maclay: Perhaps it was the hon. Member for Fife, West (Mr. W. Hamilton).

Mr. W. Hamilton: It was not me, either.

Mr. Maclay: I apologise. I cannot believe that the hon. Member for Edinburgh, East raised it. In any event, whoever did, I have answered it.
The hon. Member for Maryhill—I knew that he was on a good point—was worried about advowson. All I can say is that it is neither barratry nor bottomry but the presentation to a living. If any further explanation is needed, the Solicitor-General will deal with it. I hope that I have answered all the questions asked.

Mr. Mitchison: I raised the point of Scottish representation or the Scottish functioning of the Commission. The Financial Secretary at the time, now Minister of Housing and Local Government, replied,
I… am inclined to think that if it were desirable—and I am not prejudging it—to bring about any statutory fragmentation of the Commissioners' operations, it would be better to keep that for the second Bill, when the Commissioners have themselves had time to look round and see how successfully they can work, to use the words of the Eve Report, in the present statutory framework'."—[OFFICIAL REPORT, 27th July, 1956; Vol. 557, c. 865.]
He said that I had been arguing for Scotland but that Scotland had not turned up on the benches behind me to press the Scottish case. In fact, my hon. Friend the Member for West Lothian (Mr. J. Taylor) was there and had intervened in the debate, and the Financial Secretary must have been a little short-sighted. But the point was taken.
We have not heard from the right hon. Gentleman what has been the result

of the experience. He mentioned one Scottish member and I take leave as a mere Englishman to doubt whether a conspicuous Highland landlord such as Cameron of Lochiel, who is the Scottish member, is the right person to deal with property of this kind. I know nothing about him personally and I have never met him. It is true that he has not much urban property, but he has a bit. I do not know what there is in Stirling; I think that there are 337 acres in the county of Stirling. The initial possession was partly residential. There are 12 acres in Edinburgh, in addition. There are all sorts of odd things inside Edinburgh —a grouse moor and 16 golf courses. It may be one of those.
In addition, there was the general property question. My hon. Friends from Scotland have indicated it clearly. It is the extent to which property, where there was a choice, should be devoted to agricultural purposes, possibly to furthering the deep interests of agriculture in the form of experimental farms, and alternatively the extent to which it should be used for sporting purposes, as apparently most of it is. It is a very remarkable thing to own practically the whole of Glenlivet and not have a whisky distillery on the property. What has the right hon. Gentleman got to say about that? Has he a whisky distillery in Glenlivet? Does the right hon. Gentleman know if he has one? As for the American millionaire with four or five wives, he is far more likely to have bought the whisky distillery than the deer forest, under the present practice.
Is this Highland laird, who no doubt is a gentleman of great distinction but who is still a little remote from the Lowland parts of Scotland, in any position to deal with this? Ought there not to be somebody rather more technically minded? The Commissioners include, for instance, a leading estate agent who comes from Kettering. He is a person of considerable distinction and great experience in this matter. That is a very different kettle of fish from a distinguished chieftain out of some Highland fastness like Lochiel.

Mr. Maclay: I should like to clear up what I have no doubt are the genuine anxieties of the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison). He mentioned some remarks


in the earlier debate. Rather surprisingly—or perhaps not surprisingly, as I know him well—I had taken the trouble to look them up. He himself at that date accepted the principle, or appeared to accept the principle, that it would be wise to see what happened in the early years of working. The hon. and learned Gentleman said:
If we are content to leave for the moment the principle of separate representation until there has been a chance of examining the working of the Commission a little longer …" —[OFFICIAL REPORT, 27th July, 1956; Vol. 557, c. 867.]
We have had the chance of examining that. I was trying to make clear that a very useful way of working has been evolved and it would be a great pity to disturb it.
On the question whether the particular distinguished gentleman who is the Scottish Commissioner has the right type of experience, I have this to say. I know that the hon. and learned Gentleman intended to cast no reflection on this gentleman, because he said at once that he did not know him. Lochiel has extremely wide experience. The hon. and learned Gentleman does not realise that he is also Chairman of the Scottish Board of British Railways and has many other interests. He is in very close touch with many things of this kind. I hope that the hon. Gentleman realises that this Commissioner could not be better, either in personal character and quality or in experience.

Mr. R. Harris: It is very difficult to put forward some metaphysical cogitations on the moral responsibilities of the Crown Estate Commissioners when the claim for independence for Scotland is running all through the debate. I hope that hon. Members from Scotland will forgive me if I do not follow them in their arguments. They have my full support for a separate Parliament for Scotland, for a customs union at the Border, for an embassy in London, and for their own representative at the United Nations. If when they have all that they are any better off than they are at the moment, I will eat all the haggis they can put in front of me.

The Temporary Chairman (Mr. George Thomas): It may save the hon. Gentleman from that if he will return to the Clause.

Mr. Harris: You are quite right, Mr. Thomas. I know I have strayed from the point, but it is a Member's duty to follow the speakers who have gone before. I am sure that Scottish Members will be glad to know that they will have my support, but I warn them that when they have all these things they will still find me representing the fire brigade officers.
I come to the point mentioned by the hon. Member for Newcastle-under-Lyme (Mr. Swingler), which is very dear to the heart of the hon. Member for Paddington, North (Mr. Parkin). That is the question of the moral responsibilities of the Crown Estate Commissioners. I am very concerned that the Commissioners should have the power to dispose of their property—that is to say, to sell it, let it or manage it—in such a way that they have the public interest at heart. They should be able to put that first, instead of always having to make money out of it, as would a company registered under the Companies Act, whether it be a private company or a public company. The word of the Bill would fit very well into the memorandum and articles of the property company for which I work or of Mr. Cotton's City Centre Properties or others of that kind. The duty is to have regard to good management, which means to manage the property so well that the shareholders will benefit, namely, to make money out of it. That is all written into the Bill.
Can the Solicitor-General import some words into the Bill that will give the Crown Commissioners some discretion to dispose of their property and handle it in such a way that when the public interest is concerned they do not worry about the profit? I am perfectly happy that when the Commissioners sell to private enterprise they should extract the maximum amount of money, but it is the words
with due regard to the requirement of good management
which I do not like. Could we perhaps add the words "taking one property with another" so that if we lose on one we could make a profit on the other and thus make up the loss?
In the case of the nationalisation Acts, the nationalised boards had to make a


profit taking one year with another. Perhaps here we could take one property with another.

The Temporary Chairman: The hon. Member is straying again. He is really discussing something that ought to have been put down in the form of an Amendment if he wanted it. We must confine ourselves to what is in the Clause.

Mr. Harris: I do not think that the words in the Clause are entirely sufficient as they stand. I should like to give another example of how they could work out in practice. If the Crown Commissioners had a shop which was for letting and if there were two applicants for the shop, one of whom was a perfectly respectable bookmaker who wanted to open a betting shop and the other a voluntary worker for the Church of England Moral Welfare Council, also respectable, under the terms of the Clause as it stands the Commissioners would have no discretion. They would have to let the shop to the bookmaker because he would be a limited liability company and because his covenant would be better than that of an individual.

Mr. W. R. van Straubenzee (Woking-ham): Would my hon. Friend relate Clause 4 (1, c) to the argument which he has just been putting forward?

Mr. Harris: It is difficult to balance up all the different Clauses. Clause 3 (1) refers to the financial aspects. All that I should like done is for some words to be put in, if that could be done, which gave some discretion to the Commissioners to have regard to the public interest. Maybe the instance which I gave was not a good one because I mentioned someone engaged in religious work. But it does not invalidate the principle that this is public property and that the proceeds from it, as the right hon. and learned Member for Kettering (Mr. Mitchison) pointed out, go into the general Exchequer.

Mr. Mitchison: I am not a Privy Councillor.

Mr. Harris: I hope that I am being prophetic. But, as the hon. and learned Member so rightly said, the money goes into the general Exchequer. Were we

asking the Crown Commissioners to forgo some income and thereby deprive the Queen of some income, we might be wrong in so doing, but we are not asking that. This is, in effect, public property and we think that the Commissioners should have the handling of it and should be entitled, if they so wish to have regard to the public interest.

Mr. Laurence Pavitt: It is a pleasure to follow the hon. Member for Heston and Isleworth (Mr. R. Harris), because he expressed far more effectively than I could the sentiment that is worrying me about the acceptance of the Clause as part of the Bill. The matter hinges, as was said by my hon. Friend the Member for Paddington, North (Mr. Parkin) and my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler), on the question of the interpretation of subsection (3) concerning what is meant by "good management."
The hon. Member for Heston and Isle-worth has done the House a good service by the cogent way in which he has made the point of the moral values which we want to attach to any Bill passed by this House. My hon. Friend the Member for Paddington, North made it quite clear that man is not an island unto himself, and, even if we cannot follow my hon. Friends up to the Highlands and Lowlands of Scotland, once we mention land of any kind it immediately raises the question of what effect this Bill is going to have on the general problem.
In this period of our history we face one of the most gigantic rackets in land values that there has ever been. We are wanting to know what kind of contribution—in terms of the problems that are facing the community, such as housing and the provision of space for amenities, and so on—the Bill will have to make.
10.45 p.m.
While it might be far removed from Scotland—which has been the centre of previous discussions—in referring to the Principality, will it have any effect on the leaseholds in Wales and the management of that land? Bearing in mind the fact that the hon. Gentleman the Member for Heston and Isleworth drew a parallel with the nationalised industries, it should be remembered that


two or three years ago, when the country faced a terrific problem of unemployment—in the same way as we now face a terrific problem in land values—the public sector was able to initiate a large amount of capital investment. It was possible, by increasing such things as the hospital building programme and road and railway expenditure, to alleviate matters. But the private sector, however, did not have sufficient conscience to use its capital in the same way, to expand in order to meet a national need instead of pursuing private profit.
We are, therefore, studying this Clause to see whether or not it is possible for good management to be interpreted to mean that when land racketeering goes on, the actions and management of the Crown Estate can in some way release land or take the bite away when there is a terrific amount of pressure in times of land shortages.
I have in mind—as have all hon. Members—the tremendous housing problems that exist in our constituencies. In Middlesex—constituencies which many hon. Members here tonight represent—there has been pressure for some time for a new town. I am wondering whether good management could mean a chunk of Windsor Park being given free to Middlesex so that a new town may be established at reasonable rates and thus house many of the people of Willesden.

Mr. van Straubenzee: That is exactly the process that will be carried out if the House passes the Bill. I have the privilege of representing the new town in question.

Mr. Pavitt: It is in Clause 4 (c) that we are hoping to see some light, but that does not help me on this question of Clause 1 standing part of the Bill. I am, therefore, wondering whether these provisions will meet the kind of thing I have in mind, and it is for that reason that I am extremely dubious on this question of the Clause standing part.
If good management can be interpreted in a wider sense—to represent the interests of the community and the moral values for which hon. Members try to stand—there would be no argument against the Clause standing part. But if it will mean an extension of the get-rich-quick attitude—a law of the

jungle—where even the Crown Estate Commissioners will take part in a kind of universal bingo—this getting the maximum amount of money for selfish motives, then I would not like to see this Clause in the Bill.

The Solicitor-General: I am sorry for stopping the Committee coming to a conclusion on this, but it would not be courteous of me if I did not try to reply to hon. Members who have spoken on the more general points, as opposed to purely Scottish matters. It would, I think, be proper for me to refer to one or two matters concerning subsection (3), on which most of the debate has turned. The speeches, on the whole, have naturally been short, because we discussed this matter fairly fully on an earlier Amendment. I shall, therefore, try to keep my own remarks short.
The question—which was posed by my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris)—comes to this; can the Crown Estate have the public interest at heart? The answer is yes. But that does not mean that their function should be confused with that of the Minister of Education, or the Minister of Health, or the Minister of Housing and Local Government, or local authorities, with all their welfare services, or the Minister of National Insurance. Their public interest is to manage the Crown Estate so that, consistent with the requirements of good management, the general body of taxpayers, the general body of citizens who depend for their welfare, their defence and all the other Government services on a steady and increasing flow of revenue to the central Exchequer, are served by the value of the estate and its return being maintained and enhanced. That is their function in the public interest. This does not mean that the Commissioners, in doing that, must act as extortionate landlords. They can have due regard to the requirements of good management.
Therefore, when the hon. Member for Newcastle-under-Lyme (Mr. Swingler) asks, "Must the Commissioners always prefere the establishment of a vice club to some public service?", I have no hesitation in answering, "No, they must not." On the whole, I should have thought that they would almost inevitably prefer using their land for some


public purpose rather than having a vice club on it. No good manager likes to depreciate all the rest of his property by having a vice club, even though he might derive quite a large income from it temporarily. He does not want to have the police coming round, and he does not want the neighbourhood depreciated. The answer is plain.

Mr. Swingler: The right hon. and learned Gentleman cannot get away with that. The answer is not plain. The Bill says nothing about public interest at all. It says nothing about it being the duty of the Commissioners to have regard for the public interest. Those are the words of the Solicitor-General. What is in the Bill is that the Commissioners shall enhance the value of the land.
If there is a choice between a vice club or gambling club which will enormously enhance the value of the land or a health centre which will enhance the value of the land much less, which will the Commissioners be expected to choose, according to the Clause?

The Solicitor-General: I was not dealing with the words "public interest", which do not appear in the Clause. The words which do appear are
with due regard to the requirements of good management.
I was challenging the assumption made by the hon. Member—and I do it with great confidence—that the requirements of good management require the sale or leasing of property to a vice club. On the contrary, they do not. The requirements of good management demand that, even though one may derive a high rent temporarily from a vice club, one does not have it in one's estate.

Mr. Mitchison: But the right hon. and learned Gentleman need not go quite so far as that. What about the choice between a club full of Tory politicians drinking champagne and, therefore, paying a very high rent and a club full of worthy missionaries drinking only tea and, being more indigent, being able to pay only a much lower rent? Surely, the missionaries ought to be preferred.

The Solicitor-General: I have answered the question put to me by

the hon. Member for Newcastle-under-Lyme, and I shall refrain from being drawn back into the delectations of the Licensing Bill, from which we have so recently escaped.
Must we always prefer deer stalking to model farms? I know that the hon. Member for Edinburgh, East (Mr. Willis) put it in a striking and picturesque manner, and I am trying to go to the essence of the problem. The answer is, "No, they must not always prefer deer stalking to a model farm." It is precisely on the Glenlivet Estate to which the hon. Member referred that the Commissioners have let land to the Secretary of State for the purpose of a model farm. Although there was no general duty under the previous law, the duty that is now set out in Clause 3 (1) was even more stringent under the previous law.
Suppose the Commissioners have let to a model farm, suppose they have let to a tenant who may have been there for some considerable time, they are not bound by this subsection to turn the tenant out and to let to a millionaire with five wives who wants it as a residence for himself and, no doubt in turn, his various wives, because that is not what good management demands. Good management allows for a reasonable human relationship between the tenant and the landlord. It does not demand in every case the rackrent from the sitting tenant. On the contrary, there is the continuity that any good landlord has in mind.
The Commission has, of course, the general duty to maintain and enhance the value of what the hon. and learned Gentleman was quite right in saying is, in effect, public property. That is what we want done with public property. We want its value enhanced, we want its revenues ancreased—but that is with due regard to the requirements of good management.
When the hon. Member for Paddington, North (Mr. Parkin) says, quite rightly, that it demands responsibility also to the people who live on the land, that is in addition to the requirement of good management which the Bill demands. That is expressly catered for in Clause 4, where considerable latitude is allowed to the Commissioners in the case


of various charitable and welfare services which do inure to the benefit of the people who live on the Crown land, because it is for the general benefit of the land of the Crown Estate. With that explanation, I hope that the Committee will accept this Clause.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 2.—(REPORTS AND ACCOUNTS OF COMMISSIONERS.)

Mr. Ross: I beg to move, in page 3, line 11, to leave out from "State" to the end of line 14.
Subsection (2) of this Clause reads:
The report of the Commissioners for any financial year shall set out any directions given to the Commissioners during the year by the Chancellor of the Exchequer or Secretary of State "—
and then we have these important words:
except any direction in the case of which the Chancellor of the Exchequer or Secretary of State has notified to the Commissioners his opinion that it should be omitted in the interests of national security.
We have here full control by the two Ministers to issue directions as to whether or not the directions shall have publicity. It is rather strange that this should come up tonight, because it is not very long ago that we had concern and commotion in the House over this very thing being pleaded by a Minister. Having quoted partly from a document, he said that he could not quote fully from it. In that case, I think the phrase used was "the public interest."
In this House, therefore, we have always been very concerned about the pleading of public interest, of national security, when it means withholding, not merely from Parliament but from the people as a whole, information as to directions that have been given by a Minister to a commission such as the Crown Estate Commission.
11.0 p.m.
I know that the justification given for the words "public security" or "national security" will be that they relate only to matters of defence. But I cannot see how to any great extent the Crown Estate will be involved in this in such a way that the people in the area will not know about it.
I do not know whether it is a bad thing or a good thing—it is probably a good thing—that we cannot take any action in the House in relation to any buildings or the siting of any base of any kind without its being known. So how we can plead the public interest in relation to the sale or development of a piece of land for a certain purpose and keep it secret is beyond me.
That would defeat the purpose of the withholding of the direction, but that is not my real concern. My real concern is the possible misuse of this power to withhold publicity from a direction that the Minister has given to the Commissioners. It is interesting to note that although the Secretary of State can act on his own and the Chancellor can act on his own in relation respectively to Scotland and England and Wales, they can also act jointly. But in this case they can veto a direction individually. If a joint direction has been given by the Secretary of State and the Chancellor of the Exchequer, one of them acting on his own and without consultation with the other could give a further direction that no mention should be made of the joint direction in the annual report.
Our main concern is abuse of power, this danger that by pleading the public interest or national security, in this case, one or other of the Ministers concerned can bring upon himself this protective shield from the glare of public opinion and Parliamentary knowledge of what is being done.
I think I am right in saying that Parliament can get to know whether or not publicity in respect of a direction has been withheld. All that a Member of Parliament has to do—he has a right to do so—is to ask how many directions have been given in the year. If the Minister says that seven have been given and only six appear in the report, we shall know, and no doubt our curiosity will thereby be aroused to find out about the one not mentioned there; and we shall then be told that it is not in the interests of national security to divulge it.
I wonder whether the Financial Secretary, who seems poised to reply—I would ask him to be very quick if he wants me to hear him—will satisfy me that this power will be very sparingly used and truly only in important matters relating to defence.

The Financial Secretary to the Treasury (Sir Edward Boyle): I gladly respond to the invitation of the hon. Member for Kilmarnock (Mr. Ross). The point is that it is essential that the Chancellor of the Exchequer or the Secretary of State should be allowed to preserve the secrecy of any directions that they may give to the Commissioners if the national interest so demands.
But there is nothing sinister about this. It is the common form security provision that is applied in the case of Ministerial directions, and I think it must be ultimately a matter for the Government of the day to decide whether there is anything that it would be against the national interest to publish. I can assure the hon. Gentleman that subsection (2) reenacts Section 2 (4) of the 1956 Act, and the words which he seeks to delete are words that are common form for a great many of our statutory provisions. For example, I have here the Coal Industry (Nationalisation) Act, 1946. Section 54 (2) of that Act contains words practically identical with those which he seeks to leave out of this subsection.
I assure him that, to the best of my knowledge, these provisions will be very sparingly used, and I hope, with that assurance, that he will agree to withdraw the Amendment.

Mr. Ross: With that explanation, I am glad to beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Parkin: Now that we have a new manifestation of the Crown answering, I hope that we shall be able to get yet another view of some of the problems that have been worrying us. I think that if the Committee is to get serious treatment from the Treasury Bench of the contents and intentions of Clause 2, we should get from the Minister replying a much more cogent and understandable exposition of what the Government have in mind—certainly something more practical and less theoretical than the arguments in some of our discussions up to now.
The draftsmen apparently thought it necessary to occupy nearly as much space for this Clause as for Clause 1, and it

must be tremendously important. I hope, therefore, that the Financial Secretary will explain it to us. In particular, I hope that he will tell us what the Government expect the Commissioners to do which will involve Clause 2 (4), because this seems to imply some kind of long-term planning, some form of comprehensive planning, which has been rejected out of hand by the Government spokesmen up to now.
The questions of premiums and leases and the sharing between capital account and income account, must surely involve a process of enhancing the value of land, which can only be the result of some comprehensive development. It will be interesting to know what the Government have in mind and how they visualise the deathless landlord appearing in this respect.
Our criticism of this Bill up to now has been that it does not appear to set a very high standard. It only sets the standards of normal trustees, and even the most reasoned reply that we have had seemed to imply that private interest and public interest coincide—that a good landlord would never do anything against the public interest, not because it was the public interest, but because it would be against his private interest. The two sides of the Committee do not seem to be able to agree on that.
Here in Clause 2 are references to elaborate financial arrangements and planning which must have been introduced into the Bill because the Commissioners already practise some kind of planning of this kind.
We have had some interesting new ideas in the debate. For many years now, the deathless landlord has been the landlord most sought after by those to whom "nationalisation" was a dirty word but who wanted in practice to get as near to it as they could. We now learn that the deathless landlord is looking for the deathless tenant as the best possible tenant giving the best possible covenant.
In the Crown Lands Act, 1927, there was a provision for payments out of the capital account for improvements which were to take place, and that provision was incorporated in the Landlord and Tenant Act, 1954. It gave the Crown Commissioners power to use the same device which they had in the 1927 legislation


when they were dealing with the case of a tenant who could not get a renewal of his lease because the landlord had pleaded that he was precluded from giving it, for one of a number of reasons which were obviously connected with comprehensive planning and development.
In those circumstances, the tenant had to be offered compensation, and that compensation came out of capital account. I suppose that some idea of that kind is embodied in Subsection (4, a). That seems to imply that the Commissioners will be undertaking the process of phased comprehensive development of the estate involved. Otherwise, they would not go to all this trouble to create this machinery for dealing with tenants who are to be displaced and for whom some compensation will have to be provided. I suppose that the lawyers have had to invent some device which regards as re-investment in the land the payment of compensation to the tenant to get out from that tenancy because it is needed for a more comprehensive development.
While throughout the debate up to now we have heard a constant denial that the Crown Commissioners can be subjected to planning regulations or be obliged to consult anyone, when we get what to the layman is this not-so-easy-to-understand Clause we find that it seems to contain an indication that there is much more in the minds of the Commissioners than there was in the mind of the Government when they drafted the other Clauses of the Bill, or than has appeared from their expositions so far. I hope that the Financial Secretary will be enthusiastic enough to spell this out to those of us who do not understand the financial side all that well, and to say exactly what is behind it.

Mr. Pavitt: I am a little concerned about subsection (2), which deals with the cover which the Commissioners will have from instructions given by the Chancellor of the Exchequer or the Secretary of State for Scotland. I presume that the reason for that cover is that if, for some reason in the public interest, the Commissioners do not make the maximum profit, they will need to have an alibi and to be able to show why they have so acted. It is, therefore, necessary for the Chancellor of the Exchequer or the Secretary of State to

decide over-riding policy in the public interest.
Earlier, it was suggested that it was as part of good management that the Commissioners would inevitably seek a good tenant rather than one who might pay a little more in the short run and not be so reliable. That was entirely the case of the Minister of Housing and Local Government when he put through the Rent Act. He said that a landlord would always want a good reliable tenant rather than a market price which was rather exorbitant. That view has proved incorrect with housing and landlords take what they can and are prepared to have short-term leases and to get their tenants out at the earliest possible moment in order to increase their incomes.
11.15 p.m.
It has been made clear from the Government benches that the Commissioners will deal only with estates and will not attempt to trespass on the functions of the Minister of Education, the Minister of Housing and Local Government, or any other Minister who has a public interest at heart. I am wondering if it does mean in subsection (2) that there can be specific instructions given by the Chancellor of the Exchequer or the Secretary of State for Scotland which would enable land to be used in such a way that would not be, perhaps, to the best financial advantage but would preserve the system of good management as put forward from the Government benches—namely, used in a way which was useful for the community, and that the due considerations of the user of the land would be given absolute weight. If that is so, I am quite happy about this subsection.

Sir E. Boyle: Clause 2 has a relatively limited scope. It provides that the Commission shall make an annual report to the Sovereign, and that their accounts shall be audited by the Comptroller and Auditor-General, who shall lay them before Parliament with his Report and shall supply the Treasury with such information as is required. It is rather remote from the Rent Act and some of the points discussed.
In answer to the hon. Member for Paddington, North (Mr. Parkin), Subsection (4) simply lays down the method


of accounting to be adopted by the Commissioners and enables them specifically to make adjustments between capital and income. I am bound to say that I cannot see anything derogatory to the public interest in that. The Subsection enlarges the Commissioners' powers under existing legislation by enabling them to provide, where they think appropriate, for the replacement of capital out of income, and again that seems wholly consistent with the public interest. Paragraphs (as) and (b), I am told, reproduce the existing rules in Section 5 (4) of the 1927 Crown Lands Act and Section 3 of the 1894 Crown Lands Act.
In answer to another point raised by the hon. Member for Paddington, North, I am told that the power under Section 15 of the Crown Lands Act, 1927, can be used to pay compensation to business tenants under the 1954 Landlord and Tenant Act, and the Commission will still be able to do this under the new powers in Clause 1. Subsection (2) of this Clause merely re-enacts Section 2 (4) of the Crown Estate Act, 1956, and simply provides that the Commissioners shall publish any directions given to them, tied with the proviso we were discussing on the previous Amendment.
I hope that with that explanation the Committee will allow the Clause to pass.

Mr. Parkin: I am grateful to the Financial Secretary. He has tried to make it as short and clear as he can. I was not suggesting that there was anything wrong with the Clause or derogatory to the public interest. Quite the contrary, I am suggesting that there is evidence of the intention of doing some comprehensive long-term planning, and I was asking what the Government had in mind or what the Commissioners were, in fact, practising. Although no reference has been made to it in the Bill and no admission of its possibility escaped the lips of Ministers when answering discussions on Amendments, this substantial point about improvements does imply that tenants are going to be displaced and compensated, but only in the interest of a better development of the estate as a whole.
I want to hear more about schemes of development—how comprehensive they are, who is consulted, whether the plan-

ning authority is officially consulted, and whether the tenant is going to be consulted where it is in the public interest that a certain amount of economic development shall take place in a certain area. It is fascinating, in view of the doctrinaire denials we have had of the possibility of anything of this kind, that provision is made here for what can be needed for nothing else. That is the only reason that the Commissioners should wish to compensate the tenant for his displacement—the fact that they are going to do something bigger and wider.
That is a most interesting point, because, of course, if ever a solution is to be found to this problem it will be found in a device whose point of impact is at the moment of the change of user of the land. It will never be solved by buying all land at once with all the problems of valuation and compensation. The device which will be found will be a change of relationship at the point of change of user, and this is what the Clause obviously provides for.

Sir E. Boyle: I am sure that these are fascinating points, but, for the reasons which I gave in my earlier exposition, I do not think that they arise on this Clause, and I do not propose to be drawn on them now.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 3.—(GENERAL PROVISIONS AS TO COURSE OF MANAGEMENT.)

Mr. Willis: I beg to move, in page 4, line 2, after "lease," to insert "feu."
I do not wish to spend a long time on this. Why has "feu" not been put in? In other parts of the Bill we have been puzzled by the continual use of English legal terminology. We never seem to use Scottish legal terminology. Why should it be excluded from a Bill dealing with Scotland?
I hope that the Lord Advocate will accept the Amendment. I hope that he will not allow Scotland to be disposed of in the words "or otherwise dispose of." I hope that he has a higher sense of the importance of his profession than to allow us to be dealt with in this way.

The Lord Advocate: I am sorry that we have not included as much Scotch—I


use that word in the non-technical sense—in this Bill as the hon. Gentleman wishes, but it is unnecessary to include "feu" here. It is covered by the words "sell, lease or otherwise dispose of." To put in "feu" would be both inaccurate and inapposite, because although one talks generally about feuing something, what one does technically, legally, when one creates a feu estate for the first time is "to sell, and in feu-farm dispose" which I think would be rather a mouthful, and we would also have to deal with cases where the consideration was not the feu duty but the ground annual, and that would be even more complicated.
I assure the hon. Gentleman that the word is unnecessary. Also, it is inapposite, because we talk about selling, leasing or otherwise disposing of not only of land but of
any right or privilege over or in relation to any such land
and one does not feu or dispone in feu-farm any right or privilege over or in relation to any such land but only the land itself.

Mr. Willis: I am very interested in the clear exposition which the learned Lord Advocate has given of this rather obtruse Scottish point. The right hon. and learned Gentleman made the point that we do not need the word "feu" because this is covered by the words "or otherwise dispose of." I suggest that "lease" is also so covered. Why put in "lease"? Why should we always be open to this desire to give priority and prestige to anything English? I would have thought that it would have been an adornment to the Bill to have included the grand Scottish words in all their pristine glory which the right hon. and learned Gentleman read out. It would add dignity to the Bill and would let us see that we were included in the Bill and that the Scottish legal aspects had been given the attention which they deserve. This is not the Scottish Grand Committee; had it been, we could have got down to an examination of these words and to the arguments in connection with them. It is rather late and, having had the explanation from the Lord Advocate, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Solicitor-General: I beg to move, in page 4, line 7, at the end to insert:
but excluding any element of monopoly value attributable to the extent of the Crown's ownership of comparable land".

The Temporary Chairman (Mr. G. Thomas): It would be convenient at the same time to discuss the Amendment in page 5, line 22, at the end to insert:
(8) Notwithstanding anything contained in subsection (1) of this section the following provisions shall apply to the determination of the consideration to be given by a person for a disposition by the Commissioners of any land of the Crown Estate comprising any portion of the bed of the sea, or any right or privilege over or in relation to any such land—

(a) the value of the land shall, subject to the provisions of paragraphs (b) and (c) of this subsection, be taken to be the best obtainable in the open market and capable of justification on normal considerations of supply and demand and on the assumption that other equally suitable facilities could be obtained by negotiation from other landowners;
(b) the purpose for which the land, right or privilege is required by the person to whom the same is disposed of shall be taken into account but no account shall be taken of so much of the value of the land, or of the right or privilege over or in relation to the land, as is attributable to the fact that all or a substantial part of the bed of the sea in the neighbourhood of that land is vested in the Crown Estate;
(c) there shall be taken into consideration for the purpose of reducing the value of the land or of the right or privilege over or in relation to the land the estimated cost of executing any works which may be required or authorised to be executed on over or under the land under the conveyance lease or other instrument by which the land, right or privilege is disposed of to that person;
(d) any question or difference arising as to the amount of the consideration shall be determined by the Lands Tribunal.
In this subsection "bed of the sea" means the shore or bed of the sea or any river channel creek bay or estuary.

Mr. Mitchison: Shall we also discuss now the second Amendment in line 7, at the end to insert:
or except at the valuation of the appropriate District Valuer made as between a willing buyer and a willing seller"?

The Temporary Chairman: That would be convenient.

The Solicitor-General: Clause 3 (1) deals specifically with the principles to be observed by the Commissioners in


their management of the Crown Estates and provides that the Commissioners, apart from exceptional cases, which are dealt with later, can dispose of Crown Estate land and interests only for
the best consideration … which in their opinion can reasonably be obtained
in all the circumstances of the case. It is a relaxation of the existing law. Previously the best rent had to be obtained, in addition to the best sale price. The best rent was interpreted by the courts as meaning the best uniform rent throughout the term, and it did not give the Commissioners the opportunity of granting leases containing provisions for a periodical review of the rent reserved.
The reason for requiring the Commissioners to get the best consideration is that this is public property, and where public property is sold or leased to a great commercial undertaking, which can afford to pay a large rent for the easement or the lease or the land itself which it takes from the Crown Commissioners—because it is of great commercial value to that firm—there is no reason why it should not pay the rent which is reasonable in the circumstances.
But a formidable case was developed on Second Reading by the hon. Member for Pembroke (Mr. Donnelly) and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) to the effect that that might operate very harshly in certain cases where the Crown Commissioners have a monopoly or semi-monopoly of the land. In the ordinary case, it can be left to the ordinary determination of the market. A commercial undertaking, for example, would approach the Crown Estate Commissioners and offer what it considered to be a reasonable price for the land or a reasonable rent for the lease or easement. If the Commissioners ask a price for the land or a rent for the easement which the commercial undertaking thinks is inordinate, the undertaking will go elsewhere and take another piece of land. I will deal with public authorities separately. I am now dealing with commercial undertakings. In ordinary cases, the ordinary supply and demand in the land market can take care of the matter.
11.30 p.m.
Different considerations apply to the foreshore and to the seabed, because there the Commissioners are virtual monopolists of the seabed and own very substantial parts of the foreshore. It is true that where the foreshore is developed it has largely passed out of the hands of the Commissioners. It has largely passed out of the Crown Estate. The bulk of ports are not part of the Crown Estate. The great Port of London, for example, is the property of the Port of London Authority.
Nevertheless, in the undeveloped parts of the foreshore there are great portions in the possession of the Crown Estate. It was represented that in such a case the operations of the market would not produce a fair consideration. For example, if the Commissioners asked what a purchaser felt was too high a price, he could not go to an adjoining landowner and pay a lower price, because there are not, or may not be, adjoining landowners. As a result of the pertinacity of the hon. Member for Pembroke in connection with oil companies in his constituency, a new policy was agreed with the Crown Estate Commissioners whereby the monopoly element had to be discounted.
It was argued very strongly on Second Reading that, if that was to be the principle which obtained, it ought to be written into the Bill. I considered that with my right hon. and learned Friend and we have tried to meet that case. The Amendment would insert the words:
but excluding any element of monopoly value attributable to the extent of the Crown's ownership of comparable land.
I had hoped that that would go the whole way to meet the objections put forward, but I will deal with the other Amendments and say why I think that the Government Amendment is preferable. I will take first the Amendment of the hon. and learned Gentleman in page 4, line 7. The first disadvantage of this Amendment is that it does not deal specifically with the point about monopoly value. It may be that the hon. and learned Gentleman would wish it to be read together with the Government Amendment, which is acceptable to him.

Mr. Mitchison: Grammatically it would follow perfectly.

The Solicitor-General: That is so. My real objection to it is that the words used are in fact a repetition of what may be expected to be meant by "the best consideration". Therefore, it is not a real alternative to the other part of the Clause. If it means something different from the best consideration that can be reasonably obtained, I ask how can a district valuer reach a fair valuation except on the test of what is the best consideration that can be obtained in the circumstances. Therefore, to my mind, the words are either unnecessary or would lead to a conflict between the two parts of the Clause.
As I say, it seems to me that the Government Amendment is preferable because it deals specifically with monopoly value, and that, from the hon. and learned Member's Amendment, if it means anything other than what is already in the Clause, it is very difficult to see on what basis the valuer can operate. I would have thought that the price as between a willing buyer and a willing seller is the best consideration. It seems to me that there is no advantage, and that there are many disadvantages, in adding the words which the hon. and learned Gentleman wishes to add.
I come now to the Amendment in the name of the hon. Member for Pembroke. That seeks to put into the Bill two things—first of all, a valuation formula, and, secondly, a requirement that any
difference arising as to the amount of the consideration shall be determined by the Lands Tribunal.
It seems to me that there are major defects in the valuation formula suggested.
In the first place, the reference to "normal considerations of supply and demand" and the assumption about other facilities being obtainable are mutually inconsistent, in a way that they are not in the express discounting of monopoly value in the Government Amendment. Secondly, with regard to paragraph (c) of the hon. Gentleman's Amendment, I am not sure that I entirely understand the intention of that. Perhaps I may have an opportunity of saying a word or two after the hon. Gentle-

man has explained the purpose of that paragraph. But, taking the words at their face value, paragraph (c) seems to suggest that the greater the cost of the works the less should be the price of the land.
That does not follow at all. What matters is the degree of benefit likely to be obtained from the development, irrespective of its cost and size. I would suggest to the hon. Gentleman that all the words in his suggested valuation formula which are really appropriate are already covered by the words in the Clause—
the best consideration … having regard to all the circumstances of the case.
Before coming to the arbitration point, may I say a word or two about
having regard to all the circumstances of the case."?
As I indicated on Second Reading, those words are designed to allow a certain flexibility between, say, an oil company bringing in a pipeline across the sea bed and the foreshore with a view to commercial exploitation at a profit, on the one hand, and, on the other, a local authority taking a sewer out to sea in pursuance of a statutory duty and with no aim of making a profit. That is a matter which can be taken into consideration.
I now come to the question of valuation. The hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) brings in the district valuer. I have already indicated that in any questions of foreshore valuation the Crown Estate Commissioners are willing to submit the matter in dispute to the Valuation Office. So I hope that the hon. and learned Gentleman will feel that his point is met in that respect. I do not see that it is appropriate in any case except where there are these elements of monopoly value to be discounted. In the other case the price can be left to the ordinary bargaining of the market.
With regard to the Amendment in the name of the hon. Gentleman the Member for Pembroke, I suggest that it is unnecessary to bring the question of the valuation of the sea bed into the sphere of the Lands Tribunal. The conception of arbitration is inconsistent with transactions for the disposal of rights and


interests in land. The price call ordinarily be settled by the haggling of the market.
We bring in the Lands Tribunal in the case of compulsory purchase. But we do not do it, for example, in what seems to be the closest comparable case—where one gets the comprehensive development of a town centre by a local authority. If it acquires the land compulsorily, that will go to the Lands Tribunal because there is no bargaining possible—none of the market bargaining. But when the local authority sells or leases off the property which it has acquired for comprehensive development, we would not dream of saying that that is a matter which should go to the Lands Tribunal. It is the same here. The way to find what is a fair price in those cases—the local authority leasing its property and the Crown Commissioners leasing or selling their property—is the same; to find what people will pay for it by bargaining.
I apologise to hon. Members for talking for so long over these Amendments at this hour, but I thought that it would be better to deal in advance with the Amendments in the names of the hon. Gentlemen the Member for Pembroke and the hon. and learned Member for Kettering and to state the objections to them, so that they can consider them when they come to deal with their own Amendments.

Mr. Mitchison: Concerning my Amendment, which comes first on the Paper, I do not entirely agree with the Solicitor-General. The form of this subsection is a prohibition. It states:
… the Commissioners shall not sell, lease or otherwise dispose of any land of the Crown Estate, or any right or privilege over or in relation to any such land, except for the best consideration …
It is, I quite agree, a common form. Suppose an alternative is put in, then if the Commissioners complied with either—what is stated in the subsection at present
… for the best consideration …
or what is stated in the alternative, they will have escaped any consequences of non-compliance with this subsection.
Therefore, if, in fact, the two things were always going to be the same, all that could be said would be that this is unnecessary. But I am not satisfied that the

two things mean the same, for two reasons. Firstly, it was the Solicitor-General himself who imported the district valuer, and the way the district valuer came into the picture was this; the Crown Estate Commissioners had made, very informally, what appeared to people later to have been an extortionate demand over the right of a foreshore. I think it was desired to acquire it by an oil company in the constituency of my hon. Friend the Member for Pembroke (Mr. Donnelly). It was not until that demand had been made that the practice arose of calling in the district valuer, or so we were told on Second Reading. In the circumstances, I agree entirely with the practice, and I should like to make sure that the practice assumed for that occasion is not abandoned by some subsequent Government. We are here legislating for what may well be a considerable time in the future.
11.45 p.m.
I see no reason against putting the district valuer in as an alternative, and I see a very good reason for putting him in. It was suggested by some hon. Members on Second Reading that the district valuer was too much in the position of a Government servant. But he is not, of course, a Government servant. He is constantly used between local authorities and owners of property of various kinds to fix a fair price, and he is the sort of person who, I think, has the confidence of practically everyone in this matter. Certainly, he has a very wide experience. I should like to include the district valuer. Although I am rather disposed to agree with the right hon. and learned Gentleman about arbitration clauses, to leave out both arbitration and the district valuer would be to leave much to much in the hands of the Commissioners in practice, even if not in theory.
Is there any difference between
the best consideration … which can reasonably be obtained, having regard to all the circumstances of the case
and the alternative I suggest of
valuation … as between a willing buyer and a willing seller"?
I think that there is. I can imagine a case where the Commissioners would have a bargaining power considerably above the average, to put it in that way.


Monopoly, of course, is the extreme case. There, they have a complete bargaining power. But there are other cases where they may have to choose between two competitors—the right hon. and learned Gentleman himself gave one instance—and the best consideration they would get would clearly be from one competitor. It is said that that is met by putting in the words
having regard to all the circumstances of the case".
I speak with great deference on this matter, but my opinion about those words is that they mean precisely nothing. So far as I know, they occur nowhere else in this connection. The right hon. and learned Gentleman will correct me if I am wrong. What do they mean? They are so wide as to cease to have any meaning at all, I should think.
One ought to know what it is that the Government had in mind when using the words
all the circumstances of the case".
They have not told us, and I do not think they can because they have not thought it out. I much prefer the very well known and common formula, which any district valuer or any other valuer would understand, based on dealings as between a willing seller and a willing buyer.
I have no objection to the Government's Amendment. I should like to see it in as well as mine just to obviate any doubt about the matter. But, in fact, my Amendment would have met the case. It was the Solicitor-General himself who referred to the laws of supply and demand under a monopoly, but the point about a monopoly is that there may be much demand but there is no supply except the one. That is the reason why we have to have some phrase like
as between a willing buyer and a willing seller
It is such a common and well understood phrase that I much prefer it to what I had at one time in mind, namely, a reference to the terms of compulsory acquisition in recent town and country planning legislation. That would make it altogether too complicated, but I think the reference to the district valuer and then to a valuation on the basis of the

willing seller and willing buyer would meet the case simply and with fairness to all concerned.
Having said all that, I know my Government well enough to realise that there is not the foggiest chance of their accepting my Amendment. So there it is, at this time of the night.

Mr. Desmond Donnelly: I am obliged to the right hon. and learned Gentleman for his attempt to meet the point made by several hon. Members on Second Reading. I think that he has made a genuinely sincere endeavour to allay some of our fears, but I must regretfully say that I do not think he goes far enough. He criticised the terms of the Amendment standing in my name and that of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), but he knows that its form is based on the general instructions which the Treasury has been considering giving to valuers. That is the real source of the Amendment's terms.
Three points ought to be made on the Amendment. First, whilst I agree that the purpose for which the land is required should be taken into consideration in the valuation, the value of the land or the facility to the purchaser is something quite different; indeed, for practical purposes, I should have thought it very difficult indeed to calculate. It is one thing to say, "Yes, this is an area where you might put an oil pipeline" or "This is an area where you might put a sewage pipe for a local authority," thus giving two valuations in return for the same sort of concession, in practical terms, according to what the land is required for. That is one thing, and I entirely agree with the Solicitor-General that there should be a differentiation in that respect.
When one examines the mechanics of how one values what the concessionnaire will do with the property subsequently to receiving the concession it becomes a different matter and raises all sorts of problems which I should have thought were most unwise to include in the general attitude of valuation, and unless there is an Amendment such as that in my name and that of the hon. Member for Cirencester and Tewkesbury, the Government will find themselves in this kind of difficulty in the future.
Secondly, the Solicitor-General said that he did not quite see what we were driving at. What I am suggesting is that there are certain facilities that might be granted by the Commissioners to an oil company or some other undertaking which may not actually involve any gain to them. A dredging operation confers no proprietary interest in the sea bed, may well improve the Crown property at very considerable cost to the developer and cause no detriment to other Crown land. My purpose in drawing that part of the Amendment was to ensure that this possibility was covered and, as the right hon. and learned Gentleman will discover on inquiry, there is a specific case at this moment under consideration with one of the oil companies where there is some dispute over the valuation.
The Solicitor-General's third point of criticism was in relation to the introduction of the Lands Tribunal. The reason for that inclusion is that although I appreciate the right hon. and learned Gentleman's good will in his Amendment the exclusion of the monopoly element in the value can be only notional. It does not cause any practical change because, as I said on Second Reading, I do not consider valuation to be an exact science but only an art. When it comes to an assessment, two valuers can always arrive at two totally different figures, and as long as there is no free market operating it is really impossible for anyone to have any sanction against the decision of the valuer other than recourse to this House. That would be, I submit, an undesirable and impracticable administrative proposal in dealing with valuations which might arise from time to time. It would leave any would-be undertaker ultimately in the hands of the Commissioners. The suggestion to introduce the Lands Tribunal is one way over the difficulty.
The Solicitor-General compared this with the leasing off of a comprehensive area of development in the central area of a town. I suggest that that is not a comparable proposal, because if somebody wished to lease a shop site in, say, the centre of Leicester, which was one area of comprehensive development, and found that it was too much, it would still always be possible for him to go to Coventry or Nottingham. He

is not finally bound to have a shop only in Leicester; there are other places. But undertakers in this country actually have to leave the country. This raises practically very much more difficulty.
So I suggest to the right hon. and learned Gentleman that the only way in which justice not only is done but can be known to be done is by having some second court of appeal in which some people can say "Yes, that is fair" or "No, that is unreasonable"—people who are not actually interested parties in the way the Crown Estate Commissioners are.
I must be perfectly frank and say that a lot of this difficulty would not have arisen but for the behaviour of the Crown Estate Commissioners over Milford Haven. This is where the lack of confidence in the administration of the Commissioners has arisen. As the right hon. and learned Gentleman said on Second Reading, there is a great disparity between what the Commissioners were asking at one stage in the Milford Haven case and what they ultimately had to accept. The very fact that there is that vast difference of many thousands of pounds shows that there was something wrong in the Crown Estate office and something fundamentally wrong with the administration of that body. It is because we want to avoid this sort of difficulty arising again that we have raised this matter at this stage in the discussions on this Bill.
There is one last point that I would suggest to the Solicitor-General. While we are anxious to facilitate the passage of the Bill, I am also deeply concerned about the future development of the port of Milford Haven, naturally, as it is in my constituency. While I have no doubt of the right hon. and learned Gentleman's own personal good will in the matter, I am still not satisfied that any future undertakers in developing the port of Milford Haven will avoid considerable difficulty and be certain that their problems will be resolved speedily unless some such proposal as this is incorporated in the Bill.
I am not tied to the words here. I should be very happy if the Solicitor-General would look at the matter again at a later stage of the Bill to ascertain whether some instructions should not be written into it so that people who are


proposing to undertake development know precisely where they are. I apologise to the Committee for having taken up so much time.

Mr. Nicholas Ridley: I, too, am grateful to my right hon. and learned Friend for having argued so cogently the case for the Amendment standing in the names of the hon. Member for Pembroke (Mr. Donnelly) and myself. I think he can also be thanked for having gone as far as he can to table an Amendment which covers at least the major part of the point which I feel should be met.
It crosses my mind that the Clause can be made to apply to such things as oyster beds, the supply and demand and the purpose for which oysters are to be grown. I feel that the matter of supply and demand in relation to oysters might actually allow the Commissioners to force up the price.
That is not so important, however, as the industrial installations of which we have been talking. The aspect which makes a foreshore development different from anything which takes place in a town or on dry land is that many of these docks and installations have to be put on one or two specific points around the coast, where there is probably no alternative site. One cannot, for reasons of depth or currents, or transport, find an alternative site.
12 m.
It is a pity that my right hon. and learned Friend's Amendment does not allow either the district valuer or the Lands Tribunal to be mentioned in the Bill. I do not think that it particularly matters which is the arbitrating authority. It can be argued either way. I favour the Lands Tribunal. If neither the Amendment to line 7 in the name of the hon. and learned Member for Kettering (Mr. Mitchison) nor the Amendment to line 22 is accepted, there will be absolutely no cure if there is disagreement.
It is easy to see that in the case of a few acres of foreshore the Commissioners will be able to say what the monopoly value should be, and there is no outside authority written into the Bill to give a decision. This is analogous to compulsory purchase by a local authority, but in this case one may say that it is compulsory purchase of a

monopoly position, where it is even harder to put a value on the facility or the right to enjoy it, because there is no yardstick anywhere else in the country.
I hope that my right hon. and learned Friend will consider whether we cannot write into the Bill some final arbitration authority, either mentioning the district valuer or perhaps following our suggestion of bringing in the Lands Tribunal, because there should be some appeal where there is definite disagreement on the value of the rights obtained.

Mr. Parkin: The Solicitor-General obviously had in mind his duty to pacify my hon. Friend the Member for Pembroke (Mr. Donnelly) and solve that particular problem. It was, none the less, extremely interesting to hear him unfolding what is in his mind in tackling what is, in effect, a new principle. I was more than delighted with the last few sentences of his speech, where it seemed that suddenly he came to meet us on this side of the Committee on an extremely important point of principle.
The right hon. and learned Gentleman's approach is an entirely new one. He is trying to establish a new principle and a new problem. I suppose that is so because he is dealing here with land which, in almost every case, had no previous use value. There is no intrinsic value in the foreshore. Of course, there is the manifestation of the half-a-crown which my hon. and learned Friend the Member for Kettering (Mr. Mitchison) mentioned on Second Reading, but even so it is a socially created value if seaweed is worth half-a-crown to somebody inland who is ready to use it.
Ordinarily, however, the foreshore has no value until it suddenly attains a socially created value. I hope the last few sentences of the right hon. and learned Gentleman will fructify in the minds of the Commissioners and others who have rejected our arguments. I hope, moreover, that, in the restrained view he is now taking of the rights of the Crown in this matter, he will consider legislation to restrict some of the monopoly value which has passed into the hands of private owners of the foreshore through the laziness of some of his predecessors in office.
I wish that there were time to develop the interesting story of the Severn


Estuary, where Dr. John Smith, a Member for Gloucestershire and the nominee of the Berkeleys, did not occupy himself with the great problems of the Civil War, but achieved a great victory by establishing the rule that the riparian owners of the Severn Estuary lands owned the bed of the river up to the middle of the navigable estuary, as a result of which some people now get a monopoly of the salmon fishing in the area, to the detriment of the old fishermen. There may be other examples of private monopolies which would be worth the attention of the Law Officers of the Crown if they have hit on the right solution to this.
I wonder whether the Solicitor-General can tell us about other devices which have passed through his mind and by which the Crown could obtain some share in the equity of industrial developments. I suppose he would say that it would mean some kind of Customs or something legally undesirable. Right at the close of his speech he seemed to be drawing an exact parallel between what a local authority would do in the case of leasing its property for development and what the Crown Commissioners would do under his proposals. But that is what we have been arguing from these benches throughout the debates. It is precisely that the local authority uses its powers for a social purpose, a planning purpose. The Commissioners could not possibly come to any conclusion about leasing the foreshore to an oil company unless it was desirable as part of the economic planning of the area that that development should take place. That must be one of the prime considerations, and the right hon. and learned Gentleman has conceded the case by making that comparison with local authorities.
Seaside resorts are certainly often in the position of using the profits from letting out pitches to the ice-cream man on the beach—jugs of tea and that sort of thing—to attract to the neighbourhood opportunities for employment for their residents out of season. It was the seaside resorts which had the earliest experience of the problems of seasonal unemployment, and they sought to attract balanced employment into the area. The prime consideration in the

use of land in such circumstances is what contribution it makes to the balance of employment in the neighbourhood and to the prosperity of the people.
If at this hour of the night the Solicitor-General is to argue that that is the right way to tackle the problem, I would not mind giving any kind of three hearty cheers which are permitted by the rules of order, and I would applaud his lead in this matter and disagree with those who are trying to perpetuate this system with some sort of device for passing the buck to someone else—the district valuer or a tribunal—who would know no more than anyone else what the value of the land was because its cash value could not be estimated, unless there is a straightforward tax on the production which passes from it. However, the social value must be estimated as part of the development and it cannot be argued that that is not part of the process of the development taking place in the area as a whole. There is no legal formula and the district valuer cannot make this an exact science, as has been said.
The balanced judgment must be whether it is better to make a concession at a low price to attract the right kind of industry into the neighbourhood, or whether there is no need to make such a concession and no need to attract any kind of industry, in which case a share of the equity can be taken in a prosperous industry which is asking for the concession.
What he has just said has been the most helpful speech that the right hon. and learned Gentleman has made. I hope that it looks as good when I read it in HANSARD as those last two or three sentences sounded. If it does, I shall begin to feel that we are getting somewhere.

Mr. Swingler: In the light of previous discussions we have had, we are entitled to underline those things which may save discussion that otherwise might just be approaching. We had previously the Solicitor-General's attempt to persuade us that we must not put into the Bill any considerations about industrial and social planning which were obligatory on the Crown Commissioners. He attempted to persuade the Committee that the Commissioners, although they might take into


account the public interest as they went along, as it were, were nevertheless to be mandated to enhance the value of the land and to exploit it to the maximum extent in monetary terms.
It is in this Clause that we get the crassest statement that the Commissioners are to get their "money or money's worth". My hon. Friend the Member for Pembroke (Mr. Donnelly) and others have complained about how that might work out, and has worked out, in certain monopolistic positions. Now we find that the Solicitor-General is ready to concede that there is something wrong about the crass pursuit of the highest profits in these cases and that something must be done to curb the powers of the Commissioners.
There are three questions I wish to address to him. What on earth did he mean when he talked about the district valuer in relation to the Bill's terminology about
… the best consideration in money or money's worth."?
As I understood him, he said there was no difference between the proposition of my hon. and learned Friend the Member for Kettering (Mr. Mitchison) that the district valuer should be introduced to make a valuation in these cases and the terms of the Bill, which say they must go to
… the best consideration in money and money's worth …

The Solicitor-General: I must have put it very badly. My intention was to say precisely the opposite—that I thought the price arrived at between a willing buyer and willing seller was the best consideration.

Mr. Swingler: What I do not understand is the objection of the Solicitor-General to the introduction of someone who is generally regarded as a fair authority in such cases and to whom cases should be referred for the fixing of a fair price. This requires same further explanation.
Secondly, how under the terms laid out here are the Commissioners supposed to make a distinction in practice between a profit-making oil company bringing a pipeline across the foreshore and the local authority desiring to lay a sewage pipe?

The Solicitor-General says it is somehow covered by the phrase
… having regard to all the circumstances …
I should like to know exactly how they do have regard to all the circumstances of the case. What does it mean? In money terms? In terms of evaluation of the land and the action they are supposed to take? Which kind of sale or lease are they to prefer when there are such alternatives? Unless we have some exemplification of that we do not know what the words
… having regard to all the circumstances …
mean, except in so far as the Bill says they are to go for the highest price. In this case that seems to be contrary to what the Solicitor-General has told us.
12.15 a.m.
Thirdly, what is meant by "monopoly value"? How will it be interpreted? The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) referred to the case of the foreshore and drew attention to the especially monopolistic character of these cases; that only a few places around the shores of this island were suitable for certain kinds of installations.
This could be said about dry land; about many parcels of land. In my constituency there are only a few places which are suitable for the erection of houses for my constituents. If we are to avoid making inroads into the best farming land, and if we are to avoid the hazards of mining subsidence, there are only a few parcels of land which are suitable for the erection of houses, schools, and other things.
This monopolistic character, this element of monopoly value, exists all over the place and has a very powerful influence on land values and on the speculation in land values. It is not confined to the foreshore.
I want to know exactly how the element of monopoly value attributable to the extent of the Crown ownership of comparable land will be excluded. If the Solicitor-General can answer that in practical terms, and also the other question, I am sure that we will make very speedy progress.

Mr. Mitchison: I was going to make the Solicitor-General an offer. It is a


bit hard to bring forward a gift horse and then have everybody looking at the beast's teeth in the way we have perhaps been doing for the last minute or two. I think that the right hon. and learned Gentleman was trying very hard to meet the point that was put, but honestly—and I hope that he will take this from me—I am not sure that he has gone far enough. I think that the root of the difficulty is not so much the basis of valuation as the method of it.
I think that on both the Amendments there was a feeling that this ought not merely to be a prohibition on the Commissioners as it is at the present time, but that there ought to be some arrangement for enabling a fair price to be arrived at by someone expert in these matters, be it the Lands Tribunal which my hon. Friend or the hon. Gentleman opposite suggested, or the district valuer, or whoever it is.
We ought to be fair in a matter of this sort. We do not want this rather unfortunate incident which happened in my hon. Friend's constituency, which has, after all, been discussed as much as it is good for any slightly unpleasant incident to be discussed, to happen again.
With the memories of the Franks Report still fresh in our minds, we did not want to err on the side of giving too much statutory harshness to the Commissioners. I will willingly withdraw my Amendment if the right hon. and learned Gentleman will look at the matter again. There are two ways of looking at the matter again. In one case one first makes up one's mind that one is not going to make any alteration and then looks at the matter again, and in the other one looks at the matter and then makes up one's mind whether or not to make an alteration. I am sure that the Solicitor-General will adopt the second and more equitable method.

Mr. Donnelly: I associate myself with what was said by my hon. and learned Friend. We are anxious that this kind of incident is not repeated in other parts of the United Kingdom.

The Solicitor-General: I am grateful to the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Pembroke (Mr. Donnelly) for their very courteous and helpful

approach, which is no more than characteristic of them. I should like to accept the hon. and learned Member's offer, but I should be less than candid with the Committee if I did not state that, with my hon. Friend, I have already considered the matter very carefully. We saw the force of the case which was put and we tried to meet it, and we considered carefully whether the use of the district valuer should be made mandatory in all cases, or whether an arbitration procedure proper should be adopted. After careful consideration we came to the conclusion that it was inexpedient. I will carefully consider all that hon. Members have said, with my hon. Friend; but it would be wrong to leave the Committee with the idea that we have a completely open mind about it.
The hon. Member for Pembroke was right when he said that there was a vast difference between the price originally suggested and the final negotiating bracket. The difference is represented by the difference between the old and new formula, and particularly the new formula as it will be in statutory form if the Committee accepts my Amendment. I confess that, even after hearing the hon. and learned Gentleman's explanation, I still do not like his Amendment. In the first place, it seems to me wrong to bring in the district valuer in all cases.

Mr. Mitchison: It is only one of two alternatives.

The Solicitor-General: I mean, not to limit that provision to the foreshore but to bring it in generally. In the ordinary case, where there is no monopoly or semi-monopoly or oligopoly, there seems to be no reason at all for bringing in the district valuer. It is much better left to ordinary bargaining. Secondly, it seems to me that there is still a false antithesis between what is the best consideration obtainable and what is the price arrived at between a willing buyer and a willing seller, and because it suggests that there is that antithesis, I think that it would be wrong to accept it.

Mr. Mitchison: Will the right hon. and learned Gentleman consider talking to a valuer about it? I dare say that he has already done so. We had similar points on the Town and Country Planning Act. The valuers have views of their own.

The Solicitor-General: I have discussed this point with the Valuation Office. May I make one point plain which I do not think was appreciated? In practice we have not abandoned the district valuer. On the contrary, in respect of the foreshore and the sea bed it remains, and will remain, the practice adopted by the Commissioners to bring him in. It is precisely because it is necessary or desirable in the case of a monopoly that this very difficult assessment of the discounting of monopoly value should be independently carried out that the Commissioners are willing to take the Valuation Office view in the event of a disagreement with a potential purchaser or lessee.
The hon. Gentleman is right in saying that valuation is an art. This is the way it will work. In the event of a disagreement between the parties, the matter will be referred to the local valuation officer. I echo the tribute the hon. and learned Gentleman paid to local valuation officers. The valuation officer will say what he thinks is a fair price—he will name the consideration to be paid. The instruction to him runs in this way:
The district valuer should assume, for the purpose of making his valuation, that there is a measure of competition, and, that if the negotiations with the Commissioners break down, equally suitable facilities could be obtained from other landowners on payment of a consideration which is reasonable in the circumstances of the case.
I hope that answers the hon. Member for Newcastle-under-Lyme (Mr. Swingler). I am told that the Valuation Office thinks that is a workable formula from its point of view.

Mr. Mitchison: I am sorry to intervene once more. I am just as anxious to be rid of all this as is the right hon. and learned Gentleman. Why not put it in the Bill in relation to the foreshore, if that is to be the practice?

The Solicitor-General: It is far better left as an instruction. I have an undertaking to the Committee that, in respect of the foreshore and the seabed, in the event of disagreement the machinery of the district valuer will continue to be invoked. I do not like the rest of the hon. and learned Gentleman's Amendment, so if only for that reason I could

not advise its acceptance. I hope that, with those assurances, the Committee will feel that we have met the gravamen of the complaint made on the last occasion and will allow my right hon. and learned Friend's Amendment to be accepted.

Mr. Donnelly: I want to raise again a point with which the Solicitor-General did not deal. It is the question of dredging. This is a very important point, because dredging can cost a great deal of money. It adds a certain amount of insult to injury if the Commissioners then charge a great deal of money for the privilege of dredging, when the dredgers may well be rendering a service to the Commissioners.

The Solicitor-General: I apologise to the hon. Gentleman for not dealing with this point. The cost of an operation like that would be reflected in the profit. It would therefore in turn be reflected in the price that a willing buyer would be willing to pay, to adopt the hon. and learned Gentleman's phrase. My own view is that in such a case he would find the benefit to the Crown Estate and the cost to the intending purchaser reflected in the best consideration which could be given for the property.

Mr. Mitchison: My last suggestion about putting the district valuer into the Bill in relation to the foreshore was unconnected with the precise terms of the Amendment. If the right hon. and learned Gentleman after thinking about the matter still objects to the reference to the willing buyer and the willing seller, that would not prevent him putting in the district valuer's machinery in relation to the foreshore. The Committee would never dream of not accepting his undertaking, but we may be legislating for a considerable time and, thought I rather doubt it, even the Solicitor-General is not immortal.

The Solicitor-General: I apologise to the Committee for not making one point clear. The Commissioners will not use the district valuer only if they get into disputes with applicants. They have agreed to go straight to the district valuer without any prior negotiation if that is wished on the part of applicants.

Amendment agreed to.

12.30 a.m.

Mr. Parkin: I beg to move, in page 4, line 10, to leave out "one hundred" and to insert "fifty."
I have often heard right hon. and learned Gentlemen opposite refer to drafting Amendments when the right word to describe them would be probing Amendments. Therefore, perhaps I may be allowed to use the same phrase about this Amendment.
I wondered why the term of one hundred years was put into the Bill. Was it just laziness, was it just a matter of following convention, or was there any special significance for its inclusion in the Bill? I should have thought from the experience of the working of the leasehold system—I am sure that in other circumstances. I should have support on that matter from this side of the Committee—that a hundred years has not turned out to be a happy period at all. It is just long enough for the form of the community's life to have been completely changed and long enough to drag out the life of a house longer than it should. It produces a mass of schedules of dilapidations and the right of appeal and requires people to restore things which are no longer required because they are out of fashion. In fact, there is no sense in it at all.
Many of the more farsighted free-holders are now granting leases for much shorter periods with certain rights of renewal and extension which bring them nearer to the point, which has arisen before in our discussion, when a change in the terms of a lease is desirable, namely, the point of change of user of the land concerned. Therefore, although I have moved to delete "one hundred" and to insert "fifty," I would rather have a shorter period and the option to discuss fresh terms in a sensible way instead of copying the old custom of a hundred years lease with all its disadvantages and all the odium attached to it now and giving no chance of a shorter lease renewable on Landlord and Tenant Act terms which gives the opportunity to discuss again the use to which the land shall be put and the proper rent which shall be paid. It is for the purpose of extracting information from the Financial Secretary that I have moved the Amendment.

Sir E. Boyle: As an old veteran of the Standing Committee on the 1954 Bill, I should be glad on some future occasion to have an opportunity of debating long leases and all that with the hon. Member for Paddington, North (Mr. Parkin).
The effect of the Amendment would be to limit the powers of the Commissioners to the granting of leases for fifty years. I am advised that, in practice, that would make it impossible for the Commissioners to let any part of the Crown Estate on a building lease, because the term of fifty years would not be sufficiently long to enable the developer to recover his capital.
Subsection (2) replaces Sections 4 and 5 of the 1927 Crown Lands Act whereby the Commissioners may grant leases for a term not exceeding a hundred years from the date of the lease or the contract from that lease if such a contract were made. It is for the reason which I have given that this provision has been inserted in the present Bill, and I must ask the Committee to accept the period of a hundred years.

Amendment negatived.

Mr. Mitchison: I beg to move, in page 4, line 37, to leave out from "money" to the end of line 38 and to insert:
by trustees and subject to any conditions attaching to such investment:
Provided that for the purposes of this sub-section any such conditions may be adapted or modified by an order made by the Treasury in the form of a statutory instrument and subject to annulment by resolution of either House of Parliament".

The Temporary Chairman: I think that it would be for the convenience of the Committee also to discuss the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison), in page 4, line 38, at end insert:
Provided that no moneys shall be invested in any such securities or investments as are mentioned in the last foregoing paragraph where the holder is not entitled to repayment of the principal within twelve years from the date of investment.

Mr. Mitchison: That will be convenient, Mr. Thomas, for although they are separate points they are closely related.
This is a case where the Government have been rather naughty. The Eve Report recommended that the Commissioners should have the powers of investment of trustees for the time being. The Government, very quietly, confined them to what I will call "savings bank powers". The Commissioners have not had a very good history about investment—at any rate, since the 1956 Act since when they have had to publish Reports—and in their Report for the year ended 31st March, 1958, they came to the conclusion that they should have an investment policy in which securities should fulfil the following conditions:

"(a) all should be dated;
(b) none should have a life of more than 15 years;
(c) the portfolio should be so arranged that a proportion matures every two or three years."
These were rather excellent conclusions, though possibly, as I shall suggest, fifteen years was a shade long for the purposes of the Commission. The Commissioners pointed out that:
The securities held by the Commissioners are needed as a reserve of liquid capital for re-investment in real estate, as opportunities offer, and for financing interest-bearing improvements; they cannot properly be regarded as a regular means of obtaining a high income or capital appreciation.
Indeed, they could not be in this case. They have been a substantial means of obtaining a substantial amount of capital depreciation.
The statement of investments held at 31st March, 1958, shows that investments that originally cost £3,800,000-odd had depreciated by that time to £2,800,000-odd, which is a fairly good loss on a not very large quantity of investments. The reason is reasonably obvious. When one looks at the investments one discovers that a substantial part of them were either irredeemable or long-dated. Why did the Commissioners think it necessary to buy anything of that sort? I can suggest an explanation.
They no doubt made the purchases at a time when the Labour Government were keeping interest rates low. Whether or not one thinks that is right or wrong, it would not have involved them in the losses which the financial policy of successive Tory Governments involved them in. In any case, that is what happened, and one does not want it to happen

again. Anyway, they have cleaned it up now, for two years later, in their Report showing the securities held on 31st March, 1960, they now have £2,500,000—and I am giving round figures—cost price and a market value of £2,300,000. I suppose that that is not so bad—in what is left, at any rate—for it is a loss of only about 10 per cent. instead of a loss of 30 per cent. or 40 per cent. They refer in their Report to having carried out the recommendations of the earlier Report.
I think that these gentlemen want looking after in this matter. They have discovered it themselves and I hope that we shall, later on in the day, be discussing the same problem in a rather wider context and in connection with an even more distinguished body of people—the National Debt Commissioners, whom I have not had the advantage of meeting. These gentlemen do meet, but this is rather a sad story. They have pulled up their financial socks and have got the matter right at last, but they should not be allowed to do it again. They may be tempted. Who knows? Let us see that their investment powers are proper.
The first Amendment suggests that the provisions of the Eve Report should be followed—a revolutionary suggestion which will undoubtedly be turned down by the Government at this hour of the night. They have previously found the Report rather convenient and have relied heavily upon it. It is now inconvenient, and they will turn it down. Such is the nature of Governments. There is an additional proviso because the Trustee Investment Bill, if it goes through, will contain some conditions about investment by trustees which are inappropriate to this particular case and which might have to be modified—and could easily be modified—by a Treasury order. That would be a quite proper thing to do in this type of case.
The second proposal, which one can treat as an alternative if the Government wish—since they will turn down both, it does not much matter—is simply that the Commissioners should be kept to securities redeemable within twelve years. If the Government like to say fifteen years, I shall not reject the offer on that account. It is really rather naughty to take the Eve recommendations, after what


has happened to the securities in this case, and introduce merely savings bank powers, without any modification. Quite a lot of public money has been lost, in what seems to have been a comparatively short time, in such a simple matter as dealing with long-dated or irredeemable investments.

Sir E. Boyle: I agree that these two Amendments are among the more important Amendments which we have discussed this evening, and I shall endeavour to explain to the hon. and learned Member for Kettering (Mr. Mitchison) the Government attitude in this matter.
The present Statutes enable the Commissioners to invest in trustee securities, but they are subject to the approval of the Treasury and, in practice, the Treasury has authorised investment only in the limited range of Government or Government-guaranteed securities authorised, as the hon. and learned Member intimated, for the investment of money paid into the fund for the banks for savings. The general Treasury view on the matter is that it is inappropriate in the case of funds like this to go beyond what one might call the Exchequer family of securities, which provide relief to Exchequer borrowings and which have other practical advantages today, for example, in the use of the machinery for investment provided by the National Debt Commissioners.
The hon. and learned Gentleman referred to the Eve Report. It is true that the Eve Committee in 1955 recommended that the Commissioners should have powers of investment similar to those given from time to time to other trustees under the general law. But in this case subsequent discussion between the Government and the Commissioners has led to the acceptance of the proposition for which the Bill provides. This being what one might fairly describe as a management reserve, it should be kept in liquid form, and suitable investments for a fund of this kind are Government securities.
The present Clause is a modification of the Commissioners' powers of investment in securities from the point of view of Statute, though it is in accordance with current practice as approved by the Treasury. I can sum it up by saying

that the Crown Estate is primarily a landed estate and, therefore, surplus capital will normally be used for the purchase of land. Apart from the power to lend money on the security of real, leasehold or heritable securities in accordance with Clause 3 (4, a), the funds invested from time to time in securities represent the management reserve of the Commissioners. They need to be kept liquid so that they can be used for investment in the purchase of land whenever suitable opportunities occur.
12.45 a.m.
I quite agree that, looking at it from the point of view of public interest and the management of public money, a wider investment Clause might in present circumstances enable the Commissioners to get a little higher return. If the right hon. Member for Battersea, North (Mr. Jay) were here, I think that I would be prepared to stand up to him on what I said in the Budget debate about the gilt-edged market but, whether he is right or I am, I do not think the importance of this is very great, because the interest on investments in securities is a pretty small proportion of the revenue of the Crown Estate. In the financial year 1959-60, it was only about £100,000 out of total receipts of over £3 million.
The Commissioners, in determining their precise investments, must also have in mind the desirability of at least maintaining capital value and, of course, of having funds readily available—and this is the main point—for financing current transactions. I think that there will also be some practical difficulties in making full use of the provisions of the Bill which we shall be discussing later today, because these are not really designed for an estate which is primarily a landed estate and uses its investments and securities only to hold its reserve readily available for investment in real property when opportunity presents itself. It is for that reason that it seemed to us best to keep to the limited range of investment provided for in the Bill, in accordance with present practice.
I come now to the hon. and learned Gentleman's second Amendment, which we are also discussing. Here, I can say that there is no dispute on the policy that the investments should be kept in


dated stocks that do not mature a long time into the future, but we feel that it would be undesirable to have a rigid provision, or that Parliament should seek to impose this kind of restriction which, even if it appeared all right now, might prove to be an impediment to the efficient investment of money needed for a particular long-term need of the Estate. The Commission's policy has been, within the range of Exchequer securities, to keep to a portfolio of dated stocks maturing in not more than fifteen years so that, in any case, the suggested restriction of twelve years would be rather too short.
These considerations surely underline the undesirability of trying to set a precise period. The Commissioners have sold their former holding of undated stocks, and their present aim is to hold a well-balanced portfolio of dated stocks maturing in not more than fifteen years. There is no reason to think that after this Bill becomes law that policy will be changed, and the Government are perfectly in agreement with it.
For those two reasons, I could not advise the Committee to accept these Amendments, and in answer to the hon. and learned Gentleman I think the short point is this. The investment of the money which the Commissioners will have available to meet their needs for working capital and awaiting re-investment is secondary to their function of real estate management. For the most part, not only will these investments be secondary but they should, I think, be held in such a form as to be readily available to meet commitments in connection with the management of the Estate and to take advantage of such opportunities as may present themselves. I must therefore advise the Committee not to accept this Amendment.

Mr. Mitchison: Sir Malcolm Trustram Eve was the chairman of the Eve Committee and, at the relevant time, was chairman of the Commissioners. Sir Malcolm Trustram Eve is far from being half-witted, and I read out the paragraph in his Report which explained the nature of the fund the Commissioners desired to have and its requirement exactly as the hon. Gentleman has just stated. They came to the conclusion that for these reasons a fund of a certain character

was required, and it is that character that we desire to import by the second Amendment. There is really nothing in the point that there is some obscure difference between twelve and fifteen. I will not argue it at this hour of the night. I think there is a case for twelve, but be that as it may.
There are two alternatives here. One is that we should trust the Commissioners and give them the powers which the Government themselves are proposing to give to ordinary private trustees but think it improper to give the people who are trustees of this fund. After all, other trustees will have funds exactly like this one to administer, and they have the sense to choose the right kind of securities for those funds. Surely, if private trustees are competent to do it under the terms of the Bill which we shall consider later in the day, then these gentlemen ought to be able to do it, too. I have no reason to suppose that they cannot do it.
That is what the Eve Report recommended, but the Government will not do it. On the contrary, they say "We cannot do that. We can only give them savings bank powers.", and they then refuse to put the limitation on the savings bank powers which the Commissioners themselves have recommended. Either we trust them or we do not. This is an extraordinary way of hovering in between, half trusting them and half not trusting them. It is contrary to what they themselves suggested or, at any rate, to what Sir Malcolm Trustram Eve suggested in the Report. It is contrary to their own practice, and it is simply there because this is the conventional form which has pleased the Treasury. It is Treasury practice. Later in the day we shall come to the National Debt Commissioners, and then we shall see where Treasury practice leads us.

Amendment negatived.

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. Swingler: This is the second time that we have found ourselves passing a Clause in the Bill that emphasises the money-making character of the Crown Estate.
We have passed Clause 1 which said that it should be the general duty of


the Commissioners to maintain and enhance the value of the estate and the return obtained from it. We are now asked to pass a Clause which says that they
shall not sell … except for the best consideration in money or money's worth".
Further on there is a proviso which says more or less that everything
is to be determined in such manner as, in
the opinion of the Commissioners
is calculated to secure to them the best consideration in money or money's worth".
These things they shall do.
I would point out to the Solicitor-General that there is no mention of the public interest, community welfare or industrial planning or any of the elements of the national interest. An hon. Member has pointed out that we are just about to reach a Clause which deals with some public purposes. The interesting thing is that this Clause says that the Commissioners may do certain things for public purposes or the welfare of the community, for charity and other things, but so far we have repeated half a dozen times that the Commissioners shall put the pursuit of profit first in all their considerations. It is against that that I protest.

Mr. Mitchison: I agree with what my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) has just said. I do not emphasise it because I mentioned it, and I intended to mention it on the very first Amendment.
There is one small point here. I am afraid that I did not hear quite all the discussion about the insertion of the word "feu", but I gathered from what the Lord Advocate said on the matter that it was covered, in effect, by "disposal". Looking at the Bill, I have a feeling that the Scottish aspect of it in the matter of language may have been somewhat neglected. There are spasmodic references to Scotland. It would have been easy to put in the word "feu" by appropriate words. It is a very common method, of course, when disposing of land in Scotland, and it is rather odd to put in the English words "dispose of" and not put the Scots word in. I wonder whether it would be too much to ask that the Lord Advocate or the

appropriate person in the Scottish Office should look not only at this part of the Bill but at others, too, to ascertain whether the adaptation to Scottish practice is sufficiently complete. It is rather odd to put a word like "advowson" in what I thought was an exclusively English term. I speak with deference. I do not know Scots law. There may be cases where the corresponding Scottish equivalent has been omitted. I do not know. Perhaps I may take the comparatively affirmative gestures of the Solicitor-General and the Lord Advocate as an indication that there is some possibility of that being so.

The Solicitor-General: I have only two things to say.
The first is in answer to the hon. Member for Newcastle-under-Lyme (Mr. Swingler). I draw his attention to the fact that Clause 4 is invoked into this Clause by the opening words of Clause 3:
Save as provided by the following provisions of this Act …
I come now to the point raised by the hon. and learned Member for Kettering (Mr. Mitchison). My right hon. and learned Friend the Lord Advocate closely scrutinised the drafting of the Bill. I am told that there is no such concept as advowson in Scotland, and, therefore, the Bill does not give a Scottish equivalent. In line 31, page 4, the hon. and learned Gentleman will find the words "heritable securities", which he can hug to his soul with delight.

Mr. Mitchison: I have seen "heritable securities," and I have hugged the creature, but it is rather strange not to refer to feuing when dealing with questions of disposal of land in Scotland. I hesitate to say this, but it is common knowledge that it is a very frequent method of dealing with land in Scotland, and it is odd not to put it in. It looks as if the right hon. and learned Gentleman has neglected Scotland. I should have thought that, even in the light of tonight's experience, the right hon. and learned Gentleman would have learnt how unwise it is to do that.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 4.—(GRANTS FOR PUBLIC OR CHARITABLE PURPOSES.)

Mr. Mitchison: I beg to move, in page 5, line 29, to leave out from the beginning to the second "the" in line 30.

Tine Temporary Chairman: I think that it will serve the convenience of the Committee if we discuss at the same time the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison), in page 6, line 4, at end insert:
(3) Without prejudice to the generality of the foregoing subsection, the Commissioners with such consent as aforesaid and without consideration or for such consideration as they think fit, may dispose of the foreshore or of any Hart of the foreshore or of a right or privilege over or in relation to the foreshore to any public or local authority and the Commissioners shall so use their powers under this section as in course of time to dispose to public or local authorities of so much of the foreshore as is under the management of the Commissioners and as they are not precluded from disposing of by any direction given under subsection (4) of section one of this Act.

Mr. Mitchison: That would be convenient, Mr. Thomas. I will put this as shortly as possible. This is a Clause about grants for public or charitable purposes, and it begins by saying that whatever is done under it can, as I read it, be done only
For the development, improvement or general benefit of any land of the Crown Estate …
I understand these words as limiting the whole scope of the Clause. The Amendment I have moved would leave those words out. The other Amendment would introduce a specific case to which I shall refer later. I should have thought that when one was dealing with the question of giving or selling cheap—if I may put it that way—land for public purposes such as those of a public or local authority, or for road construction or watercourses or reservoirs, or, under Clause 4 (1, c)
for providing, enlarging or improving a place of religious worship …
and so on, one should not limit oneself by words of that kind.
I said at the beginning of the debates on this Bill that it seemed to me that what the Government were trying to do was to give the Commissioners the character of good Tory landlords, and that I did not think that that was good

enough. Some of the things that have been said since then make me wonder, if these are good Tory landlords, what on earth bad Tory landlords are like.
1.0 a.m.
Be that as it may, I should have thought that even on that rather narrow view of the matter the words ought not to be left in. This ties up too tightly what ought to be a public duty in the case of the Commissioners of Crown Estate with the business of estate management. If the words were literally enforced—if they are capable of being enforced—a great many things which a reasonably good person would do—to use that broad phrase—it would be possible for the Crown Estate Commissioners to do. Partly on the ground that my hon. Friends and I feel that that concept of the duties of the Commissioners is too narrow, and partly on the ground that even on the narrower view the words are still too narrow, I should like to see them out.
Now I come to the specific case and I must refer again to my seaweed. I still feel a little hard put to it having to pay 2s. 6d. a year for the privilege of having to remove seaweed from the foreshore. The Lord Advocate knows as I know that along the coast of Scotland people take seaweed from the foreshore and use it for fertilising the fields. That is done mainly in the wilder parts of Scotland—I should not think that they do a thing like that in Edinburgh, but they do on the West Coast of Scotland—and it is an instance of the sort of thing in which the Commissioners get involved in connection with the foreshore.
Under the law of England, no one has any right to go on the foreshore at all, except fishermen for the purpose of their craft. The Solicitor-General will remember a case of the lord of the manor who wanted to put some bathing machines on the foreshore, but the Court of Common Pleas decided by a majority that he could not do it and had no right to do it. The only dissenting judgment dissented on a very interesting premise. It was thought proper to have bathing machines in those days, and it was said that the practice of bathing ought to be encouraged because it enabled the citizens of an island State to rescue shipwrecked mariners.
In spite of all those considerations, the case confirmed or decided that no


ordinary citizen had any right to go on the foreshore, except fishermen in the pursuit of their craft. In Scotland there is a curious thing called jus spatiendi, which in English or Scots means "right of walking" and which to some extent, apparently, enables the Scots to go on the foreshore.
There is a third aspect to this matter of the foreshore and I mention this with some feeling. We hear a good deal about really messy beaches covered with oil discharged from ships. That oil is a nuisance to everybody. I should have thought that it was a legal nuisance, too, but a nuisance in the ordinary sense of the word it certainly is. It is on the land belonging to these gentlemen, the Crown Commissioners. Do they ever do anything about it? I have never heard so. I dare say that the Solicitor-General will be able to give instances when the Commissioners have been found patiently scratching oil off the foreshore, or taking steps to prevent it accumulating there.
Seriously, whether it is a question of dirty beaches and oil on the foreshore, or a question of the rights of individuals to use the foreshore, or a question of having things like my seaweed, surely the Crown Commissioners are not the right people to own the foreshore. I have suggested that they ought to be able to dispose of the foreshore and that it ought to be their duty—not with any time limit and an actual date—to hand it over to the local authorities. Local authorities do not own it at present. It is not within their jurisdiction. I should have thought that they were the best people to do it.
The Government may say that they have consulted the local authorities and that they do not want to have it. I could understand that objection, because the foreshore is rather a liability, but if it is not going to be handed over to the local authorities what are the Crown Estate Commissioners going to do about cleaning it up? The answer to that question would really be interesting, but it is too late to develop this fascinating subject a little more closely. We shall never know, for instance, about the king and the 49 casks of brandy, the case that the Solicitor-General will remember. The king got the 49 casks, and died soon afterwards.

Mr. van Straubenzee: As one who is, in a Parliamentary sense, a neighbour of the Crown Estate Commissioners, I have very much sympathy with what the hon. and learned Member for Kettering (Mr. Mitchison) is seeking to persuade the Committee to accept. I have no idea what advice the Solicitor-General will give us, but I should be very glad to feel that he would be able to concur, at least in spirit, that they should follow the advice of the hon. and learned Gentleman. There are most excellent powers given in Clause 4, and it is a thousand pities that some hon. Members who have castigated the Commissioners earlier have now left us. It is particularly unfortunate that the hon. Member for Heston and Isleworth (Mr. R. Harris), who clearly had not studied the provisions of the Clause when he addressed us, has gone to bed.
What may be a real point in my constituency is that if, in an area, the Commissioners are invited, and feel it wise, to make land available for the provision of a school, they must by their statutory duty be sure that it is
For the development, improvement or general benefit of any land of the Crown Estate,
and not for the benefit generally of the area or for the benefit of the surrounding land. It is the Crown Estate that must benefit.
I should have been glad of some explanation of their power in that regard. We have great confidence in their ability to administer an estate in their hands, and they could surely be given a certain discretion in that matter. While I would not necessarily seek to press the matter tonight, if the Solicitor-General would suggest that this aspect—one of good neighbourliness—will be looked at again, however briefly, it might remove some anxiety which is quite non-party and which is an anxiety to make the Bill workable.

The Solicitor-General: Clause 4 gives power to the Commissioners to make grants for a number of wide public or charitable purposes, but as the hon. and learned Member for Kettering (Mr. Mitchison) pointed out, all their powers under subsection (1) are governed by the opening words that it must be
For the development, improvement or general benefit of any land of the Crown Estate,


Those words are rather wider than my hon. Friend, the Member for Wokingham (Mr. van Straubenzee) might have suggested. For example, there have been two very recent cases where similar powers have been exercised—because this is largely recapitulation of existing powers. The first was land leased for the siting of a village hall at Oxshott, which is by no means exclusively taken up with the Crown Estate, but the Crown has a substantial estate in the neighbourhood. The other is of more immediate interest to my hon. Friend and is where land was licensed for the construction of a reservoir on the Windsor Estate. The Commissioners have considered that the general improvement or general benefit of the Crown Estate can properly be construed in a wide sense, and I should have thought that they were right in that.
The hon. and learned Gentleman in his Amendment goes further, because by eliminating these words what he is doing is to enable the Commissioners to make grants for any public or charitable purpose whatsoever whether or not it is for the general improvement or general benefit of any land of the Crown Estate.

Mr. Mitchison: It has to be done with the consent of Her Majesty, and that imports the Government's responsibility.

The Solicitor-General: Nevertheless, the point remains that what one is doing is to allow the Crown Estate Commissioners to make grants for any public or charitable purpose at less than the best consideration, whether or not it redounds to the advantage of the Crown Estate even in the wide sense that I have suggested.
One should remember that we are dealing with public property. This is in effect the property of the nation. It reverts, constitutionally speaking, at the end of each reign to the Sovereign, and the settlement which has habitually been made for the last two hundred years is made at the beginning of the new reign. But this is public property; therefore, if general grants for public or charitable purposes are to be made, they should be made by the appropriate organ of Government. The Commissioners can properly be given wide powers to make grants for charitable purposes, as long as in the most general sense it can be said to redound to the advantage of the Crown

Estate, but it would be wrong in the circumstances to go further.
The second Amendment deals with the foreshore, and I can deal with it quite briefly. The foreshore is part of the Crown Estate and is capable of producing very valuable revenue; revenue far in excess of the 2s. 6d. a year by which the Exchequer benefits from the hon. and learned Gentleman. One has only to think of sand and gravel extraction. Where people are going to extract sand and gravel commercially to derive a profit, should not they pay a proper consideration to public funds? It is the public fund, the national fund, since it is part of the Crown Estate, which should benefit in such a case.
But, says the hon. and learned Gentleman, what about the amenities of the foreshore? That is a perfectly fair point, but that is already taken care of by existing practice. What the Crown Commissioners do is to encourage local authorities to take regulating leases of the foreshore adjacent to their areas. They can then regulate the use of the foreshore, control the use of materials, and in other ways regulate the activities of the public on the foreshore—to which as a matter of grace which has developed into custom—they have access and preserve the amenities. Great areas of Crown foreshore are already on such leases, particularly in the neighbourhood of the more popular resorts. As I say, the Crown Estate Commissioners are anxious and willing to encourage more local authorities to make use of those powers.

Mr. Mitchison: I rise only to say that nothing could be less satisfactory than that reply.

Amendment negatived.

1.15 a.m.

Mr. Pavitt: I beg to move, in page 5, line 36, at the end to insert "for the purposes of".
This is only a tidying Amendment. I will not delay the Committee long with it or with the next Amendment. We have paid much attention to the Clause because after the rather harsh commercial landlordism which seems to animate the rest of the Bill, the Clause is one in which a little of the milk of human kindness starts to flow. We feel that


the insertion of these words makes the Clause much clearer, and I hope that the Solicitor-General will accept them.

The Solicitor-General: There is perhaps a little ambiguity in this paragraph, as it might be read
for the purposes of any public or local authority … exercising powers conferred by or under any enactment for the supply of water.
I imagine that that is the point which exercises the mind of the hon. Member for Willesden, West (Mr. Pavitt). It was not the Government's intention so to limit the purposes of any public or local authority. The Amendment makes it plain that it is not intended to be so limited, and I advise the Committee to accept it.

Hon. Members: Hear, hear.

Amendment agreed to.

Mr. Pavitt: I beg to move, in page 5, line 39, to leave out "or improvement" and to insert "improvement or maintenance".
This deals with only a small point. I hope that we shall have the pleasure of hearing the Solicitor-General accept this Amendment, too. It concerns a principle very well argued by my hon. Friend the Member for Paddington, North (Mr. Parkin) on Second Reading. What we sought to do throughout that discussion was to preserve the principle of stewardship on the part of the Commissioners. There would be a constant responsibility not only for the matters which we have mentioned previously but also for maintenance—a responsibility to maintain the property in the best possible condition.

The Solicitor-General: When the hon. Member for Paddington, North (Mr. Parkin) earlier said that he agreed with a great deal at the end of my speech, I began to be very nervous, and I determined to see what I had said which had drawn that tribute, because I felt that I had probably been extremely incautious. I was even more nervous when the cheers of hon. Members rang in my ears a moment ago, but it is a very sweet sound in the ears of any Minister and very unexpected. Encouraged by what happened then, I advise the Committee to accept the Amendment.

Amendment agreed to.

Sir E. Boyle: I beg to move, in page 6, line 7, to leave out from "Estate" to the second "or" in line 8.
Subsection (2) empowers the Commissioners to make grants in money out of income for religious or educational purposes connected with the Crown Estate or for hospitals or other purposes tending to the welfare of residents or employees. The words we seek to omit were first inserted because they appear in Section 5 (2) of the Crown Lands Act, 1894. I do not think that the words are necessary and the subsection would run very much better if it simply read:
The Commissioners may, out of the income of the Crown Estate, make contributions in money for any religious or educational purpose connected with land of the Crown Estate or for any other purposes tending to the welfare of persons residing or employed on any such land.
In other words, it makes it perfectly cleat that the contributions in money must tend to the welfare of persons resident or employed on the Crown Estate. I think that this is a reasonable departure from past precedents and the word of the earlier Act. I commend the Amendment to the Committee.

The Temporary Chairman: I omitted to mention that it would be convenient to discuss with this Amendment the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison) in page 6, line 8, after "infirmary", insert:
library, community, centre, village hall".

Mr. Mitchison: This is a somewhat doubtful procedural trick by the Government. They have at the last moment inserted an Amendment which causes my Amendment in page 6, line 8, to fall. Theirs is a starred Amendment, but they are the Government and so it appears on the Notice Paper and is called. If they take that criticism seriously, I assure them that I have much more fundamental criticisms of their conduct. I see what the hon. Gentleman intends by his Amendment. I think that I am right in saying that the objects I had in mind, that is to say, contributions to a library, community centre, or village hall, would all come within the language of the subsection as it will be when certain words are deleted by the Government Amendment. It may be possible to think up an ingenious case in which something would be welfare but not a religious or


educational purpose. Even so, it is all covered. Therefore, the procedural trick has succeeded. The Government have no doubt taken this wise and sensible step because I pointed out to them the difficulties of contending that a cemetery tended to the welfare of persons residing or employed on the land. It may do many things, but not that.

Mr. Parkin: I hope that the Solicitor-General will bear with me. I want very briefly to say how much I welcome this device of his, which will sweep away archaic phraseology and the conception of the old-fashioned institution. By the omission of these words the whole Clause will be much more up to date and comprehensive. It will be more in line with modern welfare services.

Sir E. Boyle: I am glad that the hon. Member thinks that. I am reminded of some words used by Lord Amory at one point in his Budget speech last year, when he talked about being inspired by reforming zeal and moving from one bold expedient to another.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 5.—(SPECIAL PROVISIONS AS TO PARTICULAR PROPERTIES)

Mr. Pavitt: I beg to move, in page 6, line 40, after "required" to insert:
by any public or local authority".
I feel that I am rather tempting Providence to come up a third time, having had two Amendments accepted for the first time since I became a Member. Though the voice is that of a Sassenach, the words are those of Scotland. I have pleasure in trying to persuade the Solicitor-General to accept the Amendment, the purpose of which is obvious.

The Temporary Chairman: It is suggested that with this Amendment we might discuss that in page 6, line 40, after "development," to insert
by any public or local authority".

Mr. van Straubenzee: On a point of order. You said, Mr. Thomas, that you thought it would be as well to discuss the two Amendments together. Actually there are another two Amendments to page 6, line 40, one of which is in my name, which fall within that heading. I

am assuming that you are calling my Amendment.

The Temporary Chairman: I am so sorry that the hon. Gentleman's assumption is not well founded. It is the Amendment in the name of the hon. Member for Fife, West (Mr. W. Hamilton) which goes along with the one that has just been moved.

Sir E. Boyle: We are now on the Amendment to Clause 5, in page 6, line 40, after "required", to insert
by any public or local authority".
As I understand the Amendment, it is to make it perfectly clear that the land in Windsor Forest can be taken for development only by a local or public authority. As now amended, the Clause would still enable the Bracknell New Town Corporation, having cleared the land, to permit it to be developed otherwise than by a local or public authority, as it is only natural it should be able to do. On that understanding, the Government are quite prepared to accept the Amendment.

Amendment agreed to.

Mr. Mitchison: I may not have followed quite properly, Mr. Thomas, but I understand that you have put the Question on the first Amendment in page 6, line 40. Is there not the last Amendment to the Clause in the same page and line on the Order Paper? I am not sure, but I thought that the Government were also accepting that Amendment.

The Temporary Chairman: I think that for purposes of discussion they were taken together, but I do not know whether the Government intend to accept it.

Mr. Mitchison: Is this a matter for which the Government have no policy?

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. van Straubenzee: I take the slight rebuke in your voice, Mr. Thomas, but I am in the difficulty that, although I know that I have no right to question why the Amendment which I put down to the Clause was not selected, the Clause is of the very greatest importance. I wish to ask my sight hon. and learned Friend a question or two, largely on subsection (3). I mentioned the matter on Second Reading.
In the area that I represent, Clause 5 is the culmination of a very long struggle—that is why I am so particularly interested in the Bill even at half-past one in the morning—between the requirement for the extension of Bracknell New Town, on the one hand, and the attitude previously taken up by the Crown Estate Commissioners on the other. They, very briefly, have asserted up to now that the land was inalienable and that however pressing, as undoubtedly pressing it is, is the requirement for extending the new town they could not co-operate.
I must say perfectly frankly—and I will cut my remarks extremely short in deference to hon. Members at this hour—having examined the legal arguments and having seen an able critique of them, I doubt very much whether they stand up. I have got ready, but now shall not need to use, evidence in the form of a statutory declaration where land which the Crown Commissioners have up to now asserted was inalienable, always had been and absolutely, under an Act of 1730, could not be sold was, in fact, offered for sale before the First World War. That, I think, shows that the claim here is very doubtful.
What bothers me is the way in which subsection (3) is hedged around. There are three requirements if the Crown Estate Commissioners are to be required to sell their land. The fact has been referred to that the ordinary powers of compulsory purchase do not apply to this body of land owners. Not only must there be
… a certificate of the Minister of Housing and Local Government …
that the land required
… is in the public interest …
which is reasonable, but there are three additional requirements. The subsection states that the land must be
… suitably replaced … by other land …
In other words, it has to be a transfer in specie. If they are to make their land available, there has got to be other land available. There is no such requirement that any other landlord could impose and I see no reason why it should be so in this case. The subsection also states
… other land (not less in area). …

So that it must not be less in area. It might be that the respective values of the land being exchanged just did not match up and there may be endless trouble in the future if we cannot find land that is
… (not less in area). …
Thirdly, the subsection states that the other land must be adjacent. These are three very stringent limitations.
This is the first time—and I say this deliberately—that the Commissioners have been forced to make their land available for sale for certain specific social purposes, and I speak a shade bitterly about this because I frankly think that the Commissioner's actions up to now in my area have not been in the public interest in this respect. That is why I have felt it proper to sit for five hours without an opportunity to gain refreshment—even to assist the Revenue—in order to see this Clause under discussion.
Bearing in mind their regard for the public interest up to now in their policy of sale, why are we hedging around their ability to sell with these limitations? What endless opportunity it gives for prevarication and discussion. "There is no suitable land adjoining," they could argue. "It is not the same or more in area," they could say. I must add that it is with regret that I have seen these severe limitations imposed. That is why, even at this late hour, I have thought it right to delay the Committee.

Sir E. Boyle: I am glad that my hon. Friend the Member for Wokingham (Mr. van Straubensee) has had an opportunity of expressing his views on this subject and of course I fully realise the importance of Clause 5 to my hon. Friend, and this subsection in particular. The purpose of this subsection is to enable suitable arrangements to be made between the Crown Estate Commissioners and the Minister of Housing for an extension of Bracknell new town.
For some part of my political life I had responsibility for compulsory purchase orders, and I had impressed upon me the importance of reading all the evidence before allowing compulsory purchase orders to be made. It is not often that one hears complaints about such orders, because so many conditions have to be complied with. Similarly,


there are many conditions before something of that kind could happen in this case.
This subsection authorises the sale, in certain circumstances—I agree laid down very precisely—of land which forms part of the Windsor Estate. In order that such a disposal should take place, two things are necessary. First, my right hon. Friend the Minister of Housing and Local Government must certify that the land is required for development in the public interest. My hon. Friend takes no exception to that. Secondly, as my hon. Friend has said, the Commissioners must be satisfied that such land can be replaced in the Windsor Estate by other land equal in area which is adjacent. Upon such disposal, any land so added to the Windsor Estate will become part of Windsor Forest.
This is the agreement reached, and I am bound to say that I do not think it unreasonable. While I understand the importance of this matter to my hon. Friend, all I can say is that I hope that he and those whom he represents will recognise that considerable trouble has been taken over the matter. It seems to me that Clause 5 is not an unreasonable solution to a genuinely difficult problem.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 6 ordered to stand part of the Bill.

Clause 7.—(POWERS OF MINISTER OF WORKS IN REGENT'S PARK.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Mitchison: We have just been dealing with Windsor Park. We come now to Regent's Park. I have an important question to put. Who gets Monkey Hill at the end of the day?

The Solicitor-General: That is a very fast one, and I am not sure that I can answer. I think that Monkey Hill is part of the Zoological Gardens, and the effect of the Clause is not to take away any part of the Zoological Gardens, but to make it possible to add to them so as to improve the landscaping of the edges. I think that it will make Monkey Hill

more visible to the general public who use Regent's Park.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 8 to 10 ordered to stand part of the Bill.

First Schedule agreed to.

Second Schedule.—(SAVINGS AND TRANSITIONAL PROVISIONS.)

The Lord Advocate: I beg to move, in page 13, line 16, to leave out "to ten" and to insert "and eight."
I think that with this Amendment might be taken the Amendment in the Third Schedule, page 20, line 8, column 3.
These Amendments repeal two Sections of the Crown Lands (Scotland) Act, 1833, which are out of date and which are never taken advantage of.

Amendment agreed to.

The Solicitor-General: I beg to move in page 14, line 7, to leave out "alienable" and to insert "inalienable."
This corrects a misprint.

Amendment agreed to.

The Lord Advocate: I beg to move, in page 15, line 16, after "sections" to insert "four."
I think that with this Amendment might be taken the next two Amendments, in lines 19 and 24.
These are really drafting Amendments dealing with technical points of Scottish conveyancing which, at this hour of the evening, not even the hon. and learned Member for Kettering (Mr. Mitchison) is very interested in.

Amendment agreed to.

Further Amendments made: In page 15, line 19, after "operations" insert "or effect."

In line 24, at end insert:
and notwithstanding the repeal by this Act of section five of the Crown Lands Act, 1873, shall continue to be registrable in the Books of Council and Session as before the passing of this Act."—[The Lord Advocate.]

Schedule, as amended, agreed to.

Third Schedule.—(REPEALS.)

The Lord Advocate: I beg to move, in page 16, line 16, at the end to insert:


20 Geo. 2. c. 50.
The Tenures Abolition Act, 1746.
Sections fourteen and fifteen.


20 Geo. 2. c. 51.
The Sales to the Crown Act, 1746.
The whole Act.


This Amendment repeals certain obsolete enactments. For the benefit of the hon. and learned Member for Kettering (Mr. Mitchison), I will say that they provided for the purchase of lands in the Highlands for the pacification and further civilising of the inhabitants of the Highlands of Scotland. It is hoped that this is no longer necessary.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 19, line 4, at the end to insert:


50 Geo. 3. c.ccxviii.
An Act for disafforesting the forest of South, otherwise East Bere otherwise Bier, in the county of Southampton, and for inclosing the open commonable lands within the said forest.
Section thirty-four, from "and shall" onwards.


I suggest that it might be convenient with this Amendment to take that in page 19, line 14.
These Amendments deal with further obsolete Amendments that are due for repeal.

Amendment agreed to.

Further Amendments made: In line 14, at end insert:


52 Geo. 3. c. clxxi.
An Act for disafforesting the forest of Park-hurst in the county of Southampton, and for inclosing the open commonable lands within the said forest.
Sections thirty-nine and forty, section fifty-one from "such lands" onwards.

—[The Solicitor-General.]

In page 20, line 8, column 3, leave out "to ten" and insert "and eight".—[The Lord Advocate.]

Motion made, and Question proposed, That the Schedule, as amended, be the Third Schedule to the Bill.

Mr. Swingler: Can anyone tell me whether there are people still employed searching for the obsolescent enactments?

If so, how many years does the Treasury think it will take to unearth them all? Are they still being brought to light? Will anybody answer that?

The Lord Advocate: The Lord Advocate indicated dissent.

Question put and agreed to.

Schedule, as amended, agreed to.

Bill reported, with Amendments; as amended, considered; read the Third time and passed.

AGRICULTURE (CALF SUBSIDIES)

Calf Subsidies (England and Wales and Northern Ireland) Scheme, 1961 [draft laid before the House, 8th June], approved.—[Mr. Vane.]

Calf Subsidies (Scotland) Scheme, 1961 [draft laid before the House, 8th June], approved.—[The Lord Advocate.]

Orders of the Day — WORKS OF ART (EXPORT)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peel.]

1.41 a.m.

Mr. Anthony Royle: I wish to raise the matter of the export of works of art. I believe that this is the first debate on the subject that we have had for many years. I must apologise to my hon. Friend the Financial Secretary for keeping him up to this very late hour after he has had a long day on the Front Bench, but I am pleased that he is to reply to my few words because I know that he has a sympathetic interest in the arts.
The present system for the export of works of art was set up by the Waverley Committee, which reported in 1952. It has worked well for the past ten years, particularly in regard to sales by private treaty, but bearing in mind the great difference between sales by private treaty and sales by public auction, in my view there should be two separate sets of rules.
The recent controversy over the sale of the historic picture by Goya of the Duke of Wellington underlines certain difficulties encountered under the present rules. I wish to put forward certain suggestions for procedure at sales at public auctions where it might be


desirable for works of art to be acquired for the nation. They will entail only minor modifications to the present system, and I ask my hon. Friend to give them his very careful consideration.
Before I detail the scheme, I want to make it clear that there are two important principles which must be maintained. First, as the Waverley Committee recommended, it must never be stated publicly prior to the auction that an application may be made to stop the export of a work of art. This safeguards the vendor and enables a fair market price to be obtained at the sale.
Secondly, the Government must make it clear that they will never bid at an auction, but, of course, they retain the right to claim an object at the final price realised if that object is considered part of the national heritage. This principle will ensure that the taxpayer is not penalised by the Government representative being bid up and thereby paying an inflated price. Galleries and museums will still be able to go and bid at auctions with their own funds.
The main scheme itself will be roughly as follows. First, keepers or directors of museums and galleries will watch carefully for objects of national interest which are likely to come up at sales. This system, indeed, is carried out, I understand, at the present time. If a work of art of national importance appears, the gallery or museum, after discussion with the Treasury, can decide to send a representative to the sale, preferably incognito.
The sale takes place, and immediately the object is knocked down, the representative of the museum or gallery will get to his feet and say "I claim this work of art on behalf of the nation if the purchaser intends to export it." This will reduce the feeling of disappointment which I think is experienced by a purchaser today. Perhaps after a great deal of time and expense, he finds days later that he may not be able to export the article that he has bought. I think that this possibly occurred to the purchaser of the picture of the Duke of Wellington by Goya.
After the auction the keeper or director applies immediately to the Treasury for finance if—and this is important—an expert licence is applied for from the Board of Trade by the purchaser. The

Treasury, after the application, immediately instructs the reviewing committee on the export of works of art to meet. I would suggest that the present committee, which was set up under the Waverley Report, should continue to carry out this function. The committee will then recommend to the Chancellor—I emphasise "recommend"—within fifteen days whether the article should or should not be purchased for the nation.
I am sure that my hon. Friend will be the first to agree with me that it is most important that we retain Ministerial responsibility. This again is underlined in the Waverley Report, which states in recommendation 22 on page 63 that Ministerial responsibility should continue. So the reviewing committee only recommends and it is up to the Chancellor to take the final decision.
In my view, the price to be paid will be the final price realised at the sale. This, I hope, will be a considerable temptation to my hon. Friend, because by working this system it is possible, and, I think, very likely, that a considerable saving will be made to the Treasury in that dealer's commission would not be guaranteed when bought by the trade for immediate export.
The Chancellor then has to decide whether to accept his committee's recommendation. I would suggest, that, again, a period of fourteen days should apply. The Chancellor has to decide within this period whether to accept its recommendation, and also to decide whether he is going to provide the money himself, whether the money will be obtained from perhaps charitable foundations or trusts, or perhaps some combination of both methods of finance.
I would suggest that the Treasury make a list—maybe it has one already—of sympathetic foundations and trusts which are willing and keen to purchase works of art for the nation, and this list should be kept at the Treasury and there should be a close liaison kept between the Chancellor and the trustees.
Now I move briefly to a point which I hope will be well received by my hon. Friend the Financial Secretary. This concerns the Land Fund. I suggest that this Fund should be used a little more generously in the


future for the purchase of works of art. I have made a few investigations in the last few days and I find that it stands at about £10 million. Has my hon. Friend strong objections to perhaps preserving £2 million or £3 million of that sum as a reserve for the purchase of articles which are part of the national heritage? Perhaps my hon. Friend will consider this. I do not ask him to give a final reply on it tonight.
This scheme which I have sketched is, I again must stress, only a suggestion in principle. There may be objections. Indeed, perhaps my hon. and learned Friend the Member for Warwick and Leamington (Mr. Hobson) may have some. One objection that may be put forward is the time scale. Is twenty-eight days enough to take this very serious decision? I feel that it probably is sufficient.
Over the past years, the reviewing committee has proved itself to be a swift and efficient body. A gallery or museum would have been in touch with the Treasury before a sale, which will give more time, and, of course, will notify the reviewing committee of its intention to object or pre-empt at the sale itself. I have discussed the scheme with experts and have received almost unanimous support in principle. These experts are people who are involved under the present system as set up following the Waverley Committee's Report. They include a leading London dealer and a leading firm of auctioneers.
I am sure that my hon. Friend will agree that some streamlining of the present regulations for the export of works of art following an auction sale is necessary. This scheme has several attractive points. First, it would ease the disappointment of the purchaser which is caused at present on many occasions, thereby encouraging important overseas buyers to come to this country and keep our art market, of which we are so proud, as the international centre of this trade.
Secondly, it would speed up the procedure considerably. Thirdly—and very important—it should enable works of art to be bought at a lower cost for the nation if and when the case arises. It would, of course, keep intact the present regulations for sale by private treaty. Finally, it is worth bearing in mind that

this procedure would seldom have to be used. Indeed, the annual report of the reviewing committee for 1959-60 reports that only five cases came in front of the committee. Of these, four would have involved the use of this scheme. There must be a term to the period which we are experiencing at the present time of transfers of great masterpieces from private hands to national and provincial collections. It may continue for a further decade, and during that period fewer and fewer pictures, silver, fine furniture and manuscripts are likely to become available.
I am sure that my hon. Friend will be sympathetic and I do ask him to consider this scheme carefully in order that we obtain for the nation the maximum proportion of these national treasures which our countrymen should have the opportunity to enjoy.

1.55 a.m.

Mr. John Hobson: My hon. Friend the Member for Richmond, Surrey (Mr. A. Royle) has suggested a form of pre-emption in the auction room in which a buyer has to declare whether he intends to export or not. The only difficulty about that is that he may not know. He may buy to export, but not have an overseas purchaser. He may have instructions to buy and have exceeded the limit, and not know whether his principal is prepared to exceed the limit.
I wanted to ask the Financial Secretary a rather wider question on the subject of the export of works of art. He will remember that the Waverley Committee considered this matter against a background of extreme financial stringency and the necessity for controlling all movements of capital at a time when our economy was not nearly so free in the world markets. We have now removed and dismantled most of the restrictions on the movement of capital. Has the Treasury considered whether any ill-feelings by purchasers from overseas could be removed by dismantling the whole of the procedure by which one has to get licences for the export of works of art?
The present position is that we are net importers, both by number and value, of pictures from America. Many pictures bought by American museums are now being returned to this country to be


sold in auction rooms here and to be bought by private collectors in this country. Has any consideration been given to a substantial dismantling of all those controls which only impede the free flow of works of art both into and out of this country?

Mr. A. Royle: In regard to my hon. Friend's first point, when a dealer makes a purchase at an auction sale and intends to put that picture into stock and sell it at a later date, the ordinary scheme laid down in the Waverley Report comes into effect when in due course he comes to sell it. I cannot agree with the other suggestion by my hon. and learned Friend the Member for Warwick and Leamington (Mr. Hobson) for the dismantling of present controls.

1.59 a.m.

The Financial Secretary to the Treasury (Sir Edward Boyle): My hon. Friend the Member for Richmond, Surrey (Mr. A. Royle) has done the House a considerable service by raising this important matter, and I am glad to have the opportunity to state the Government's present practice and to make one or two comments on what my hon. Friend has said.
The present system of control of the export of works of art is designed as far as possible to reconcile the legitimate conflict of interest which may arise between those who are concerned with the buying and selling of works of art, on the one hand, and, on the other, the broader interests of the nation in retaining, so far as is practicable, its national heritage of great artistic works. It is very important in considering this question to bear both those aspects in mind.
As my hon. and learned Friend the Member for Warwick and Leamington (Mr. Hobson) said, the control of the export of works of art has nothing to do with exchange control. It exists only to protect the national heritage of objects of historical or aesthetic importance which might otherwise be dispersed. However, I entirely agree with my hon. and learned Friend that this country now has what is probably the most important art market in the world. While I do not want to get on to this in detail tonight, many of the arguments in the past used in favour of free trade as an economic theory have some rele-

vance when considering this issue of the control of export of works of art.
One thing I would make plain, because I think that there is sometimes misunderstanding about it, is that it has never been Government policy to try to ensure that major works of art sold in the United Kingdom should all be acquired by public collections.
The export control is not designed to this end, although it does tend sometimes to have this effect. Nor is it part of export control policy to secure important pictures more cheaply for public collections.
The real purpose of export control is to help to keep some of the more important works of art, of National Gallery standard, which clearly belong to the national heritage, inside this country. If a major work of art which has been in the country for some years is put up for sale, the Government's direct interest is fully met if it is bought by a private citizen in the United Kingdom. I think that it is wrong for the Exchequer to provide most of the money needed to acquire even the most important pictures for public collections through the special grant procedures while there is any private individual or organisation able and willing to buy them.
The question whether a special grant could be given for the purchase of a picture by a public collection is always a difficult one, and each case has to be considered separately on its merits. So far as the competence of Treasury Ministers to pronounce on those merits is concerned, we try to get the best advice we can, and I am not sure whether differing Treasury Ministers are likely to differ more acutely than some of the experts. We simply do our best.
It would be quite wrong for anyone to assume, particularly in present circumstances, that the Government accept any obligation to contribute to the cost of any work of art which may be for sale in this country, even one in respect of which the reviewing committee withholds the licence. The national collections can draw on a certain amount of resources. Purchase grants for the current financial year made to the 13 national collections in this country totalled £364,000. Since the beginning of the financial year 1959–60, the Government have authorised special grants


totalling more than £500,000. With these resources the national collections can do much on their own account to protect the national heritage.
It is natural that in this context we think mainly about pictures, but at times we give special grants for other works of art as well. I hope that always we shall remember the needs not only of the great national collections in London but also the needs of the provinces. While I do not want to get into too much detail, there is no harm in saying that one of the reasons why the Government were so ready to give a special grant to the Walker Art Gallery, in Liverpool, through the machinery of the Victoria and Albert Museum purchase grant for museums in the regions, was that we were so much impressed by special efforts that Liverpool had made to help itself. It is always a good principle, when one is required to help local bodies, to help those who have been effective in helping themselves.
Mr. John Walker, Director of the Washington National Gallery, in his address to the National Art Collections Fund, suggested that the national collections should be given an opportunity to buy an object, at a fair price to be negotiated with the owner, before an auction took place, but that, when once they had had an opportunity but had not taken it up, if the object were to be sold at a higher price and exported, an export licence should be automatically granted.
The difficulty of that would be the negotiation of the fair price, which might place the national collection in a very difficult position. It might be tempted to pay more for an object than it was sure it was worth because it would know that if it did not, it might be lost to the nation. And the owner might be tempted to stand out for a higher price because he would have little or nothing to lose if the negotiations failed and the picture went to auction. It might surprise the House to know how high a value owners of works of art are apt to place on their own pictures, even those of relatively mediocre merit, when there is any question of their acquisition with money provided by the taxpayer.
I come now to say a word about my hon. Friend's plan, which contains a number of interesting features. He kindly

sent me an outline of what he intended to propose, and I will gladly arrange for his plan to be studied. At first sight, I am doubtful whether the new arrangements which my hon. Friend proposes will significantly remove the uncertainties which, as I see it, must necessarily beset the purchase by overseas buyers of works of art coming within the special scrutiny category.
The present procedure has been in operation for nearly ten years, and foreign buyers must by now be well aware of its purpose and of the way in which it operates. Under the new procedure which my hon. Friend has proposed, it seems to me that the foreign purchaser at an auction would still not know for some time whether he was going to pay out the money.
But I am more concerned with the position of the Treasury, which under my hon. Friend's plan would, I think, be somewhat invidious. It must be remembered always that it is the trustees of the national collections and not the Treasury who purchase such pictures on behalf of the State. The Treasury may make special grants, but it is the trustees who make the purchase, and if, as suggested by my hon. Friend, the gallery authorities consult the Treasury before laying claim to a picture at the auction, this means that my right hon. and learned Friend the Chancellor of the Exchequer must always make up his mind about the often very difficult question of a special grant, if one is needed, before the picture is auctioned.
I am doubtful about that. I am inclined to think not only that this is something which the Treasury ought not to try to do, but I have a feeling that it could be shown to be inconsistent with the Treasury's responsibility to this House for the proper maintenance of public expenditure. I do not want to sound too pompous about this at two o'clock in the morning, but I am not sure that the Public Accounts Committee could not with some justification criticise the procedure suggested by my hon. Friend. I will arrange for my hon. Friend's interesting proposals to be looked at, and when we have had more time to examine them I will write to him and give him a considered view.
The reconciliation of the interests of British owners, foreign purchasers in our


all-important international market, and our national heritage remains a difficult problem, but on the credit side I think that it can fairly be claimed that the reviewing committee scheme is working reasonably well and with impartiality.
A major test of the importance of an item—whether a public collection can raise the necessary funds to buy it if an export licence is withheld for a period to enable this to be done—is applied in each case when the committee advises that in accordance with the Waverley criteria it is a work of national importance.
In answer to my hon. and learned Friend the Member for Warwick and Leamington (Mr. Hobson), it seems to me that twelve licences withheld in three years is a rather small proportion of the total number of overseas sales on the London. art market, though I realise that the very fact of this procedure must itself cause a certain amount of uncertainty.
At the same time, the present export control system has been the means of retaining in this country a number of significant works of art which public collections have acquired at a fair price

and which are now on display to the general public of this country. My feeling is that given the acknowledged difficulty of trying to reconcile what are in a sense irreconcilables, the present system of control over the export of works of art does not work too badly, and causes, I hope and believe, the minimum amount of inconvenience to the various parties with their different interests in the system.
This is a subject to which we at the Treasury attach considerable importance. The work of the Treasury in respect of the arts, the museums and national collections is among our important work there, especially at a time when there is more interest, not least among younger people, in art in this country than ever before. I assure the House that we shall always try to reconcile the important demands of the art market, which is a feature of the nation today, with our efforts to secure for the nation those pictures which we think are works of art which ought to form part of the nation's heritage.

Question put and agreed to.

Adjourned accordingly at ten minutes past Two o'clock.